How to Compare PPO & HMO Coverages


Determine estimated total costs for the HMO and PPO. Include the cost of coverage plus out-of-pocket costs. Out-of-pocket costs include all fees for care, including deductibles, copayments or coinsurance. Refer to employer-provided enrollment materials or contact a health plan company directly to obtain cost information.


Check out quality information about the HMO's and PPO's processes, systems and care. Sometimes employers include access to this information via enrollment materials or tools. It is also available through the National Committee on Quality Assurance (NCQA) web site.


Think about coverage needed and compare plan benefits. For example, if a covered individual needs chiropractic treatment, look at how both plans cover care and potential limits. Copays and the number of visits covered per year may vary by plan.

Tips and Warnings

  • Go to a health plan company's website to see if it offers a plan compare tool.
  • If coverage is offered through a large employer, enrollment materials and tools may include details to help compare plans.
  • Not all doctors and hospitals participate in all plans. If accessing care from a particular doctor or hospital is a priority, check the plan's provider directory to ensure plan participation and maximize benefits. Remember, an HMO will not cover care from a provider outside its network. A PPO usually covers out-of-network care, but at a lower level than in-network care.
  • A Health Maintenance Organization (HMO) and a Preferred Provider Organization (PPO) take a managed care approach to health care and coverage, with networks of providers---including doctors, hospitals and other medical professionals---agreeing to render services for special rates. However, there are two key differences. An HMO usually requires care through a primary care physician (PCP). With a PPO, individuals can receive care from any provider without PCP coordination or referrals. Also, an HMO generally requires a network provider or it pays no benefits. A PPO pays benefits for in- and out-of-network care; however, benefits for out-of-network care is lower.