HMO vs. PPO

I have been getting a ton of questions lately about what is the difference between an HMO vs. PPO.  Well nowadays things are not as cut and dry as they use to be considering now there are HMO Open Access and POS.  But, lets talk strictly about HMO--Health Maintenance Organization--and PPO--Preferred Provider Organization.

HMO

•  A very tightly controlled network.
• Must have primary physician refer you to any specialist
• No out of network coverage
• Price is usually lower than a PPO

PPO

• Broad network
• Free to see specialists without a referral
• Out of network coverage to some extent
• Price is usually higher than an HMO due to more extensive network

Now I will say that if you want to save some money and don't mind a smaller network, a good compromise would be to go with a HMO Open Access Plan (HMO OA).  Most HMO OA Plans allow you to see specialists with out a referral and have a better network than a tradition HMO.  The only downside is that there is usually no out of network coverage.  Let's face it though your employees and you should always be utilizing the in network benefits because even if you have an out of network the benefits are going to be significantly reduced.