What is the difference between HMO and PPO insurance plans?

The correct response highlights a key distinction between Health Maintenance Organization (HMO) plans and Preferred Provider Organization (PPO) plans. HMO plans are designed to promote coordinated care by requiring members to select a primary care physician (PCP) who acts as a gatekeeper. This means that members must use a specified network of doctors and facilities in order to receive full benefits. If they choose to see specialists or providers outside this network, they often face higher costs or may not receive coverage at all unless they have obtained a referral from their PCP.

In contrast, PPO plans offer more flexibility. Members enrolled in a PPO can see any healthcare provider, whether they are in-network or out-of-network. While using in-network providers typically results in lower out-of-pocket costs, members are not restricted to a network and can seek care from any provider without needing referrals. This structure allows for greater choice and convenience for individuals who may prefer specific specialists or services.

Understanding these differences helps consumers make informed decisions about their healthcare insurance options based on their preferences for flexibility, cost, and provider accessibility.