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Ashley PoynterOct 204 min read

HMO vs. PPO: What's the Difference

Updated: Oct 20

When choosing a health plan, many people wonder what the difference is between an HMO vs. PPO. Each is a different type of plan that provides different types of coverage. To start, let’s look at what those letters stand for: an HMO is a health maintenance organization and a PPO is a preferred provider organization.

Understanding how each type of plan works can ensure you make an informed decision in finding health insurance that’s right for you.

HMO Health Insurance Plans

HMOs have a network of specific doctors, hospitals, and other providers that have agreed to offer lower rates to members of the HMO. The network also agrees to meet quality standards. One big area where things are different with an HMO vs. PPO is how members can see providers. With an HMO, members must see a provider within the network in order for care to be covered. These plans also have greater restrictions for coverage, including limits on treatments, tests, or visits.

Another difference is that many HMOs require members to choose a primary care physician (PCP), who acts as the coordinator for all your care and treatment. The member must obtain referrals from their PCP rather than going directly to a specialist, otherwise the care, treatment or tests administered may not be covered under the HMO plan. Similarly, choosing to see a provider outside of the HMO network is typically not covered and requires the person to pay entirely out of pocket for care. HMO plans tend to have lower monthly premiums, low or no deductibles, and less out of pocket costs than PPOs.

PPO Health Insurance Plans

With PPO plans, members have more flexibility and less limits when it comes to choosing a doctor or hospital. While there is a network of providers, there are fewer restrictions if a person wants or needs to see an out-of-network provider. If you do use a non-network provider, the PPO will pay for care in many circumstances, though sometimes it is at a lower rate.

Unlike an HMO, members can see a doctor, specialist, or other provider without needing to see a PCP or obtain a referral first. While the best benefits for coverage come from visiting a doctor or hospital within the PPO’s network, members are free to obtain care from a non-network doctor or hospital and may still receive some benefits. PPOs often have higher premiums and deductibles than HMO plans.

Decent meets you in the middle

With Decent health plans, you never have to worry about making tradeoffs between quality of care and cost. We offer affordable, comprehensive health plans built around the specific needs that self employed people have. Our plans are also centered around Direct Primary Care (DPC), making it extremely simple and easy for you to get the care you need, as often as you need it, without having to jump through hoops. No matter which plan you enroll in, you’ll never pay anything to see your PCP. We also offer virtual options for each of our plans, making it super simple for you to see your doctor via virtual visits. We offer three plans that cater to different needs:

  • Pathfinder Bronze Plan — Looking for a plan in case something bad happens? This plan is for you and you’ll enjoy the lowest premiums in Austin.*

  • Lonestar Bronze Plan — Expect to use your insurance from time to time? This is your plan! Members of this plan geek out on the $0 medical deductible.

  • Trailblazer Silver Plan — Do you have a family, medical conditions, or prescriptions? This plan is a good fit for you. Members of this plan brag about the manageable copays for most everything.

Wait, there's more! If you're a small business owner, we now offer plans to help you be a hero to your employees. We launched ACA-compliant health insurance plans priced at 40% below market with a Net Promoter Score 5x industry average. Here’s the plans your employees will love:

  • Zero Plans - Our Zero plans all come with a $0 medical deductible.
  • Saver Plans - Our Saver plans are all HSA compatible.

We offer transparent rates and awesome customer service so you have an easier time navigating health insurance plans. Check us out today!