HMOs usually have lower premiums and out-of-pocket expenses. They are designed to help keep medical costs down, but they require you to use a network of providers that they have listed. An HMO plan requires you to choose a primary care physician, who is listed as one of their providers, who manages your healthcare. You will be required to get referrals from your PCP to see any kind of specialist. Generally, HMOs do not cover out-of-network care except in emergency situations. HMO plans are more restrictive; they are limited to coverage, and you will have less flexibility, but this helps with lower costs. Typically, HMO members do not need to file claims as the insurance company pays the provider’s office directly.
PPOs usually have higher premiums and out-of-pocket expenses but offer more flexibility in choosing your medical care. PPO plans allow you to see any doctor or specialist without needing a referral, including out-of-network providers. (Seeing out-of-network does increase possible out-of-pocket expenses, though) PPO plans may occasionally require a member to file claims on their behalf for out-of-network services if that provider is not able to file the claim for the member, but in-network providers will usually handle filing the claim for you.
So, which one is better? It just depends on personal preference and on what your needs are. Things to consider: Do you need lower cost premiums and not care so much about flexibility, or do you want flexibility but a little higher premium?
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