Which Are the Benefits and Drawbacks of a PPO Versus an HMO?

Primary advantages of PPO plans relative to HMOs include broader provider networks and greater flexibility to see specialists without requiring a referral, according to Bankrate. PPOs often have higher premiums than HMOs because of the greater access, though, reports Insurance.com.

With PPO coverage, a member is able to see a specialist without having to first go to a primary care physician. HMOs require the initial visit and a referral from a PCP. This requirement can be time-consuming and cumbersome for people who want to get directly to the specialist. PPOs also tend to have greater flexibility for going outside of the network for coverage, according to Bankrate. While this privilege normally leads to higher costs, someone who has a preferred provider might pay the extra fees. In contrast, HMOs are among the least flexible group-network plans, reports Insurance.com.

Some PPOs require covered members to pay higher copayments when providers charge above-standard fees, according to Insurance.com. On top of higher premiums and expensive out-of-network charges, costs for PPOs are often much greater than with an HMO. In addition to physician fees, some people pay a higher deductible for out-of-network coverage than with in-network coverage. This deductible can lead to expensive surgical procedures or intensive care.