Significance

• An HMO is a health care plan where a primary care physician manages its members basic medical care and refers members who require specialized care to an in-network medical provider.
  
  A PPO is a health care plan in which members can choose their medical care from an in-network or out-of-network medical provider. Members do not need a referral.
  
  

Cost

• Typically, the only costs involved with choosing an HMO is the monthly premiums and the requisite co-pay for doctor visits. Costs involved with a PPO typically consist of a co-payment for doctor visits. If you choose to see an out-of-network provider, then you will have to pay the provider directly and your insurance company will reimburse you a portion of your payment. In addition, when you see an out-of-network provider, you pay an annual deductible and coinsurance.
  
  

Access

• An HMO offers less flexibility in that you must choose providers who are in-network; out-of-network medical care is not covered. In addition, if you want to see a specialist, such as an otolaryngologist, you must get a referral from your PCP first. A PPO, on the other hand, is more flexible in that members can see any doctor he chooses, in or out-of-network, without a referral.