Here’s the main difference between an HMO and PPO:
PPO – You can go to specialists without a referral and you can go outside the plan’s provider network, although you’ll have considerably more out-of-pocket expense if you do that.
HMO – You have a primary care provider that refers you to specialists. You cannot go outside of the plan’s provider network except in an emergency.
My personal preference has generally been PPO’s but under the Affordable Care Act (which is ANY health insurance plan you buy as an individual), provider networks have gotten very narrow, and many providers don’t accept plans that are purchased through Covered California – and some providers don’t accept individual plans at all.
So… if you have a PPO and need a specialist, a lab test or other provider, you have to be very careful to be sure that your provider is in your PPO network. Otherwise, you could be responsible for heavy out-of-network charges.
However, with an HMO, your primary care provider refers you to specialists and other providers that are in-network… so you don’t have to worry about additional out-of-network charges.
An additional HMO benefit is that all your providers work from a shared database. So if you need specialists, they can all see your medical records instead of having to piece bits of information together from a bunch of non-related providers.
Bottom Line: I’m not recommending one over the other – I’m simply pointing out the differences. The correct choice is the choice you make for yourself and your family.
Author: Neil Steinman
Neil Steinman is the principal of Orange County Health & Life Insurance in Orange County, CA – and has been serving the needs of California residents for nearly 20 years.