HMO vs. PPO: Which Is Best for You in 2025

Key Takeaways

HMOs cost less than PPOs but require referrals and lock you into network providers.

PPOs let you see specialists directly and go out-of-network, though you'll pay higher premiums.

Your choice between HMO vs PPO depends on your budget, health needs and provider preferences.

What Is an HMO?

An HMO, or Health Maintenance Organization, assigns you a primary care doctor who coordinates your medical care and refers you to specialists when needed. Your plan covers only in-network doctors and hospitals (except in emergencies), but you’ll pay the lowest premiums. HMOs work best if you’re comfortable with this setup and want to keep costs down.

What Is a PPO?

A PPO, or Preferred Provider Organization, lets you see specialists without needing a referral. You can visit any doctor, including those outside your network, though out-of-network care usually costs more.

You don’t have to coordinate through a primary care doctor or wait for approval before booking appointments. PPOs tend to have higher monthly premiums than HMOs, but they give you more freedom to choose your doctors and hospitals.

Difference Between an HMO and a PPO

The main difference between health plan types comes down to how much control you want over your care and what you’re willing to spend. With an HMO, you’ll work with a primary care doctor who coordinates your treatments and referrals. A PPO lets you see specialists directly and even go out-of-network, though you’ll pay more out of pocket for that flexibility.

Choosing the right plan depends on your health needs, budget and how hands-on you want to be with your care. Once you’ve decided between an HMO and a PPO, compare top-rated health insurance companies to find quality coverage that fits you best.

The table below highlights the differences:


Monthly Premium	Lower	Higher
Out-of-Network Coverage	None (except emergencies)	Yes, but costs more
Referrals Required	Yes, from primary care doctor	No
Primary Care Doctor	Required	Optional
Best For	Budget-conscious, healthy individuals	People wanting flexibility and choice
Deductibles	Usually lower or none	Often higher
Specialist Access	Need referral first	Direct access

Pros and Cons of HMO and PPO

Both HMO and PPO plans have their upsides and trade-offs, depending on how you like to manage your health care. An HMO keeps costs lower but follows a set structure for choosing doctors and getting referrals.

A PPO offers more freedom to see the doctors you want but usually comes with higher premiums. Here’s a quick look at what each plan offers and where it may fall short.


Pros	Copays stay predictable and affordable for routine visits Your primary care doctor coordinates all your care, which prevents duplicate tests and conflicting treatments You won't deal with claim forms since the network handles billing directly	You can see any doctor without referrals, including specialists You control your health care decisions without needing approval from a primary care doctor Your coverage travels with you across state lines and different regions
Cons	You must get referrals before seeing specialists, which adds time and extra appointments Your coverage stops completely if you go outside the network (except emergencies) Switching primary care doctors requires approval and can take weeks	You'll pay deductibles before insurance kicks in, unlike HMO copays Out-of-network visits can cost you a lot, even after insurance pays Claim paperwork becomes your responsibility when you go out-of-network

Which One Is Best for You?

Your health habits, budget and care preferences determine which plan saves you money and stress. An HMO works well if you're healthy, rarely need specialists and want predictable costs. A PPO makes sense if you have ongoing health conditions, see specialists regularly or value choosing your own doctors without obstacles.

Note: Health insurance plans differ by state and provider. Consult a licensed insurance professional for advice to find the right fit based on your needs.

Choose an HMO if you:	Choose a PPO if you:
Visit the doctor once or twice a year for checkups	Manage chronic conditions requiring multiple specialists
Want predictable monthly costs without surprise bills	Travel frequently for work or split time between states
Don't mind coordinating care through one primary doctor	Value picking your own doctors without getting permission first
Live in an area with strong HMO networks and quality providers	Can afford higher premiums for flexibility and broader coverage

Bottom Line

If you rarely see doctors and want lower monthly bills, go with an HMO. However, pick a PPO when you see multiple specialists or need doctors outside your area. The best plan for you depends on what matters most to you. Once you've decided, the next step is to get health insurance and enroll in the right plan.

What Is the Difference Between HMO and PPO: FAQ

These FAQs explain the main differences between HMO and PPO plans to help you decide which option works best for you:

Is a PPO worth it?

A PPO is worth the higher premiums if you see multiple specialists, travel frequently or want to choose your own doctors without referrals. You'll pay more monthly but gain direct specialist access, out-of-network coverage, and control over your health care decisions.

What is the difference between Medicare Advantage HMO and PPO?

Medicare Advantage HMO and PPO plans follow the same core rules as regular HMOs and PPOs. HMO plans cost less but require you to choose a primary care doctor and get referrals for specialists. PPO plans charge higher premiums but let you see any Medicare-approved doctor without referrals, including out-of-network providers.

Why do doctors prefer PPO over HMO?

Doctors prefer PPOs because they avoid administrative delays from referral requirements and can treat patients more quickly. Doctors must get approval from HMOs before referring you to specialists, which adds paperwork and wait time. PPOs let doctors focus on your care instead of coordinating with your primary care physician for referrals.

Which Is Better, HMO or PPO?

Neither plan is universally better. You should go for an HMO plan if you rarely see doctors and want predictable, lower monthly costs and choose a PPO if you manage chronic conditions requiring multiple specialists or need flexibility to see doctors outside your network.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

He writes about economics and insurance, breaking down complex topics so people know what they're buying.

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sources

Healthcare.gov. "Health Maintenance Organization (HMO)." Accessed October 6, 2025.
Medicare.gov. "Health Maintenance Organizations (HMOs)." Accessed October 6, 2025.
Healthcare.gov. "Preferred Provider Organization (PPO)." Accessed October 6, 2025.
Medicare.gov. "Preferred Provider Organizations (PPOs)." Accessed October 6, 2025.

HMO vs. PPO: Which Is Best for You in 2025?