One of the key differences between HMO and PPO health insurance is that with HMO plans, patients choose a single primary care physician and with PPO plans there is greater flexibility. Patients with an HMO, or health maintenance organization, are required to seek a referral before seeing other physicians if they want the health care to be covered by their insurance, whereas those with a PPO, or preferred provider organization, are not required to do so, according to the Blue Cross Blue Shield Blue Care Network of Michigan. However, patients with an HMO plan do not need to seek a referral in cases of emergency.
Another exception on HMO plans is obstetrician or gynecologist appointments, for which women do not need a referral within their health care network. This includes pap tests and well-woman visits.
The chief benefit of an HMO plan, by which health care is arranged through the primary care physician, is its lower cost, notes the Blue Cross Blue Shield Blue Care Network of Michigan. On PPO plans, while patients can see medical professionals outside of their health care network, it will result in greater out-of-pocket costs, that is, costs not covered by insurance.
There is also a third type of health insurance, known as EPO, or exclusive provider organization. Similar to PPO plans, EPO plans allow patients to see medical professionals of their choice without a referral. However, their choice is limited to a specific network and health care beyond that network is only covered in emergencies.