What is the difference between an HMO and a PPO?

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The main idea is how care is accessed and what you pay. In an HMO, a primary care physician acts as your gatekeeper, you generally stay within a defined network, and you usually need referrals to see specialists. This setup keeps costs down because services are coordinated through a limited network and out-of-network care is often not covered. In a PPO, you have much more freedom to choose providers, and you can see specialists without a referral; you can also go out of network, but at higher costs. Because of the greater flexibility and broader provider options, PPO plans typically have higher premiums and more out-of-pocket costs, though they offer coverage for out-of-network care. So the description that captures these contrasts is that HMOs use PCP gatekeeping and in-network care with lower costs, while PPOs offer broader choice with higher costs and some out-of-network coverage.