HMO and PPO are two of the most common health insurance plan structures, available across both Medicare Advantage and ACA Marketplace plans. They differ in three main ways: provider network rules, referrals, and out-of-network coverage.
HMO (Health Maintenance Organization):
- You must use the plan's in-network providers for non-emergency care (out-of-network is not covered, except in emergencies)
- You typically need a referral from your Primary Care Provider (PCP) to see a specialist
- Lowest premiums and lowest copays
- Smaller, curated provider network
- Best for: people who want low costs, are okay with a smaller network, and don't mind getting referrals
PPO (Preferred Provider Organization):
- In-network providers cost less, but out-of-network is also covered (at higher cost-sharing)
- No referral required to see specialists — go directly
- Higher premium than HMO
- Larger network
- Best for: people who want flexibility, travel often, or have specialists in mind who may be out-of-network
Visual comparison:
| Feature | HMO | PPO |
|---|---|---|
| Premium | Lower | Higher |
| Out-of-network coverage | None (except ER) | Yes, at higher cost |
| Referrals to specialists | Required | Not required |
| Geographic flexibility | Tied to network area | Larger network, often national |
| Best for snowbirds | Poor fit | Good fit (PPO with national network) |
| Best for chronic conditions with specific specialists | If specialist is in-network | More flexibility |
Two other less-common types:
EPO (Exclusive Provider Organization):
- Like an HMO (in-network only) but with no referral requirement for specialists
- Lower premium than PPO
- Common in ACA Marketplace plans
POS (Point of Service):
- Hybrid: PCP-coordinated like HMO but allows some out-of-network coverage like PPO
- Less common
- Mid-tier premium
Medicare Advantage specific:
- About 60% of MA enrollees are in HMOs
- About 40% are in PPOs (mostly local-area PPOs, fewer national-network PPOs available)
- HMO MA plans often include extras (dental, vision, transportation) that PPO plans don't, because the network is more controlled
ACA Marketplace specific:
- HMO is the most common ACA structure
- EPO is the second most common
- PPO availability varies widely by state — common in TX, FL, IL; rare in some Northeast states
- POS plans appear in some Marketplace areas but are increasingly rare
How to pick:
- List your doctors first. Check whether they're in-network on the plans you're considering. If your top doctor is only on a PPO, that limits your options.
- Estimate how often you see specialists. If frequently, PPO's no-referral policy saves time and PCP visits.
- Consider geography. If you travel often, snowbird, or have college-age kids in another state, a PPO with a national network is much more flexible.
- Look at total annual cost, not just premium. A $0/month HMO might cost more out-of-pocket than a $80/month PPO if you make many specialist visits.
What to do next: Call (866) 534-1886. We compare every HMO, PPO, and EPO plan in your ZIP, check that your specific doctors are in each plan's network, and tell you which structure fits your specific situation. Free.