What’s the difference between HMO and PPO insurance plans? - Business Health Trust (2024)

Business Health Trust partners Premera Blue Cross and Kaiser Permanente – two of the most well respected insurance companies in Washington State. Premera’s most popular plan is a PPO while Kaiser Permanente offers both an HMO and PPO.

HMO stands for Health Maintenance Organization.

PPO stands for Preferred Provider Organization.

Although each plan varies, in general, HMO insurance plans are more economical and come with lower monthly payments, lower deductibles, and lower prescription costs. In some cases, there may not even be a deductible. The tradeoff is not having the flexibility to work with providers outside the main network and the requirement to go through a primary care provider for specialist referrals. The other good news is that patients won’t be hassled with filing claims on their own for out-of-network care.

PPO comes with more flexibility as your employees will be able to choose from in-network and out-of-network providers. Better access to specialized care is a plus as well since they generally won’t need a referral from a primary care doctor. Though all plans are a bit different, for the most part, these perks mean higher fees and potential restrictions on which medical services are covered. On the other hand, lower copays and dependable coverage can be expected for in-network trips.

It depends! For employees who will be working with a single provider or looking for lower monthly insurance premiums, an HMO may be appropriate. If they’ll need more flexibility or more specialized care a PPO could be important.

Kaiser Permanente actually offers both HMO or PPO, so this should be considered if offering this HMO/PPO option for your employees is important. Those both insurers have large networks of highly respected primary care providers and specialists, Premera, with their PPO offering, comes with the largest network.