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What is a HMO and PPO? Which type of insurance is best for me? Let’s break it down.

HMO’s (Health Maintenance Organization) and PPO’s (Preferred Provider Organization) are similar.  They both give you access to doctors and hospitals that are covered by your insurance. Doctors and hospitals contract with insurance companies to form networks. Health Maintenance Organization’s and Preferred Provider Organization provide care within a specific network.



HMO covers the provider’s visit if it’s in-network. You are responsible for 100% of the cost for a out-of-network visits. Additionally, plans usually have a limited number of MD visits, labs/tests, and treatments per calendar year. To see a specialist, Health Maintenance Organizations typically require a referral from a primary care physician (PCP).  In addition, they charge a monthly or annual premium. HMO’s do not usually have a deductible. However, they charge a co-pay of $5-$20. HMO’s cover Emergency Room visits in or out-of network.


In most PPO’s an annual deductible has to be met. Once the deductible is met, insurance starts paying. However, you may be required to cover a certain percentage of the total medical charges. A co-payment of about $10-$30 for certain services is common. You can see a specialist of your choice without having to see a PCP (primary care physician) first. A visit to the doctor or hospital outside the network will be covered at a lower rate than in-network visits. Premiums tend to be higher for a PPO.


In summary, picking the right health insurance is important. It’s crucial to know which type of insurance you have (HMO or PPO) to prevent unexpected charges. Of importance to note is what your insurance requires to see a specialist. As a patient advocate, one of my services is to educate the consumer on plans available. In addition, SW Colorado Patient Advocate can help with billing issues and billing errors. Contact SW Colorado Patient Advocate for assistance.