PPO stands for Preferred Provider Organization and HMO stands for Health Maintenance Organization.

There are several key differences between these two types of policies. The most important one would be that PPO policies allow you to see providers who are not within your network. With this type of policy you can self-refer to any doctor of your choice including specialist without the hassle of getting a referral. With an HMO policy you must first chose a PCP who will help coordinate care. After seeing your primary care specialist he or she will write a referral to see a specialist if he or she cannot help.

With an HMO, if you chose to see a provider that is not within your network you must pay for care out of pocket as your insurance will not cover it. With a PPO, you can see doctors who are not in the network but you are subject to your out of network deductible as well as a higher fee. Keep in mind that with a PPO there is a deductible to be reached. Once your deductible has been satisfied your insurance starts to cover.

Another difference is the cost of these two policies. HMO’s are typically easier on your wallet since they offer lower monthly premiums making these policies more affordable. PPO’s on the other hand are more costly in exchange for the flexibility they offer when allowing you to choose your own doctors.