PPO vs. HMO: What's the Difference?

There are two main types of health insurance plans: PPO (Preferred Provider Organization) and HMO (Health Maintenance Organization). Both types of plans have a network of physicians, hospitals and other health care professionals that agree to provide medical services at pre-negotiated prices and rates for Blues members. 

Nearly 30,000 doctors and 158 hospitals work with Blue Cross Blue Shield of Michigan and Blue Care Network.

  • Our PPO network: As a Blue Cross Blue Shield of Michigan member, you have access to all of the hospitals and more than 95 percent of the doctors in Michigan.
  • Our HMO network: As a Blue Care Network member, you have access to more than 5,000 primary care physicians, including family doctors, internists and pediatricians. You also have access to more than 15,000 specialists and most of the state’s leading hospitals.

So what’s the difference between these two types of health plans? Here’s a chart to break it down:

PPO

HMO 

Overall costs

Higher monthly premiums and out-of-pocket costsLower monthly premiums and out-of-pocket costs.

Flexibility and control over health choices

Lots of flexibility: You can go to any health care professional you want, typically without a referral – inside or outside your network.Limited control: You pick one primary care physician who coordinates all your health care services. In order to see a specialist, you’ll need a referral from your primary care physician, except in an emergency.

Size of network

LargeLimited

Do you have to stay in network?

No, but if you choose to go out-of network, you may pay more and some services might not be covered.Yes. Visits to health care professionals outside your network typically aren’t covered by insurance.

Things to remember

Stay in network for smaller copays and full coverage. And, keep track of your deductible.Always get a referral to see a specialist. Without a referral, your insurance won’t cover the cost of care.

For more health insurance tips visit bcbsm.com/101 or follow the hashtag #Covered101 on our social channels. If you have a specific question, please submit your query online through our Customer Action Center

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Photo Credit: Lotus Carroll

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