When choosing a health insurance program, it's easy to get lost in an alphabet soup of acronyms — everything from ACOs to WHRN. 
However, the three most common types of managed health care plans are Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and POS (Point of Service plans). Learn more about Managed Health Care Organizations (MCOs).
Health Maintenance Organizations
An HMO offers a provider network of physicians, nurses, therapists and facilities. A primary care physician (PCP) acts as a gatekeeper, evaluating your health and recommending referrals to specialists when needed.
Premiums and copays are typically lower than other plans, which can save you money. On the downside, HMOs generally provide little or no coverage for out-of-network care; if your current physician isn't in the HMO network, you'll either pay out of pocket or select a participating PCP. For related information about hospital and medical plan arrangements, see Hospital and Medical Service Plans Insurance.
Preferred Provider Organizations
PPOs also use a network of providers and set relatively low copayments for in-network care. Unlike HMOs, PPOs often cover some services received outside the network and let you visit participating specialists without a referral from a PCP.
That added flexibility usually comes with higher premiums. If you receive treatment outside the PPO network you may be responsible for a deductible or the difference between the plan’s allowed charge and the provider’s billed amount.
Point of Service Plans
POS plans blend elements of HMOs and PPOs. Like an HMO, a POS emphasizes a PCP who monitors care and issues referrals; like a PPO, it may allow out-of-network care at a higher out-of-pocket cost.
If you use an in-network referral, the insurer typically pays a high percentage of charges and handles paperwork. If you go out of network or see a specialist without a PCP referral, you’ll generally file claims yourself and receive lower reimbursement.
As a rule of thumb, a POS offers more flexibility than an HMO but less than a PPO.
The Bottom Line
HMO, PPO, or POS — which provides the best value depends on your health needs, preferred providers, and budget. Our professionals can review options and help you choose the plan that fits your situation; you can ask an agent.
Frequently Asked Questions
What is the main advantage of an HMO?
HMOs typically have lower premiums and copays, which can reduce your routine health care costs.
Can I see a specialist without a referral in a PPO?
Yes — PPOs generally allow you to see in-network specialists without a PCP referral, though out-of-network care may cost more.
How does a POS plan differ from an HMO or PPO?
POS plans combine features of both: they use a PCP gatekeeper like an HMO but may allow out-of-network care similar to a PPO at higher cost.
What should I ask when comparing plans?
Ask about provider networks, referral rules, premiums, copays, deductibles, and how out-of-network care is covered.