What is the difference between a ppo and a hmo

The basic difference between ppo and hmo depends upon two factors - level of benefits and the amount of freedom to choose physicians and hospitals. The details is discussed below.

1. HMO stands for Health Maintenance Organization which is a health insurance provider constructed with an insurance company. They offer their services at a fixed price. On the other hand, PPO stands for Preferred Provider Organization. They are loosely organized and are not as restrictive as HMOs.

2. HMOs cost less than PPOs. This is the main advantage of HMOs over PPOs. HMOs are cheaper and their premiums are lower than all other plans.

3. Now the factor is freedom to choose physician or doctor. If you choose PPO plan then you have full freedom to choose your doctor or physician by yourself who is not even in HMO network. But HMO plan restrict it. You may not able to choose physician you like who is not in the HMO network. Your primary care physician must be a member of HMOs, so you have to change doctor if you not see him or her in the network.

Overall, if the specific doctor or physician is the factor then you should choose PPOs which will allow you to do this whether cost is higher than HMOs. On the other hand, if cost is the factor then you should choose HMOs without any hesitation because of its low premium coverage advantage.