Updated August 2026 · Reviewed by the CoverageCo team
An HMO keeps costs lower by requiring you to stay in-network and usually get referrals to see specialists. A PPO costs more but lets you see specialists directly and covers out-of-network care at a higher share. If you have established specialists or travel often, the PPO's flexibility may be worth the premium difference.
Key takeaways
- HMO: lowest cost, in-network only, referrals usually required.
- PPO: highest flexibility, no referral needed, out-of-network partially covered.
- EPO sits between them — no referrals, but in-network only.
- Check whether YOUR doctors are in-network before comparing premiums.
The four plan types compared
Most Marketplace plans fall into one of these structures:
| Type | Out-of-network | Referrals | Typical cost |
|---|---|---|---|
| HMO | Emergencies only | Usually required | Lowest |
| EPO | Emergencies only | Usually not required | Low to moderate |
| POS | Covered at a higher cost | Usually required | Moderate |
| PPO | Covered at a higher cost | Not required | Highest |
What a referral requirement actually means day to day
Under an HMO, you generally pick a primary care doctor who coordinates your care. To see a specialist, you go through them first.
For some people that's a genuine benefit — someone is holding the overall picture rather than treating you in fragments. For others it's an extra appointment and a delay before getting to the specialist they already know they need.
If you manage a condition that requires regular specialist visits, the referral step is worth weighing seriously. It's not a dealbreaker for most people, but it is friction, repeated.
The out-of-network question is the expensive one
With an HMO or EPO, care outside the network is generally not covered at all except in emergencies. That's not a higher cost share — it's you paying the entire bill.
PPO and POS plans cover out-of-network care, but at a meaningfully higher share, and often against a separate, higher deductible.
This matters most for people who travel frequently, split time between locations, have a specialist outside their area, or live somewhere with a thin local network.
How to choose without overthinking it
Start with your doctors, not the plan type. List the providers you actually want to keep and check them against each plan's network. Plan type is a useful shorthand, but the specific network is what determines whether your doctor is covered.
Then ask how much flexibility you'd genuinely use. Paying a PPO premium for freedom you never exercise is a common and quiet waste. Equally, choosing an HMO to save money and then discovering your specialist is out of network is worse.
Networks also change year to year, which is why re-checking at renewal matters even when you're staying with the same plan.
Common questions
Do I need a referral with a PPO?
Generally no. PPO plans usually let you see specialists directly without a referral, which is one of the main reasons they cost more than HMOs.
Is an HMO cheaper than a PPO?
Usually yes. HMOs keep premiums lower by restricting you to a defined network and routing specialist care through a primary care doctor.
What is an EPO plan?
An EPO combines features of both: like an HMO it generally covers in-network care only, but like a PPO it usually doesn't require referrals to see specialists.
What happens if I see an out-of-network doctor with an HMO?
Outside of emergencies, the care generally isn't covered at all, meaning you'd be responsible for the full cost. Always verify network status before scheduling.