HMO vs OAP: Which Health Plan is Better?

When choosing a health insurance plan, two common options to consider are HMO (Health Maintenance Organization) and OAP (Open Access Plan). But what is the difference between an HMO and OAP, and which offers better coverage?

Below we will compare HMO vs OAP plans on network size, flexibility, costs, and other key factors to help you determine the right plan type for your needs.

What is an HMO Health Insurance Plan?

An HMO is a type of managed care health plan that provides medical coverage through a network of doctors, hospitals, and providers. Here are some key features:

  • Provides care from a limited network of providers
  • Requires selecting a primary care physician (PCP)
  • Referrals required to see specialists
  • Out-of-network care not covered except emergencies
  • Lower premiums but higher out-of-pocket costs

HMOs emphasize preventive care and coordinating treatment through a PCP to control costs. Their limited provider network allows negotiating lower fees in exchange for patient volume.

What is an OAP (Open Access Plan)?

An OAP is a type of managed care plan that combines elements of HMOs and PPOs (Preferred Provider Organizations). OAP members get access to multiple provider network tiers:

  • Tier 1 – HMO-style network requiring referrals and a PCP
  • Tier 2 – Larger PPO-style network allowing self-referrals
  • Tier 3 – Out-of-network providers with highest costs

Members can mix-and-match between network tiers, with different copays/coinsurance by tier. OAPs offer a balance between HMO cost controls and PPO flexibility.

Comparing HMO vs OAP

Here is an in-depth comparison between HMO and OAP plans across key factors:

Network Size

HMO – Very limited provider network. Usually requires choosing doctors within the HMO network.

OAP – Offers 2 or 3 tiered network options: HMO-network (Tier 1), PPO-network (Tier 2), out-of-network (Tier 3).

Flexibility in Choosing Doctors

HMO – Very restrictive. Requires a PCP referral to see specialists even within network.

OAP – More flexible depending on tier used. Tier 1 works like HMO. Tier 2 allows self-referrals like a PPO.

Out-of-Network Coverage

HMO – Virtually none except emergencies. All care must be in-network.

OAP – Out-of-network coverage under Tier 3 but with highest deductibles and coinsurance.

Cost of Premiums

HMO – Lower monthly premiums due to provider network cost controls.

OAP – Slightly higher premiums than HMO but lower than a PPO.

Cost of Co-pays and Co-insurance

HMO – Lower copays for Tier 1 services but high costs if using Tier 2 or 3.

OAP – Varies by tier used. Lowest copays for Tier 1, moderate for Tier 2, highest for Tier 3.

Choice of Doctors

HMO – Very restricted choice limited to HMO network doctors.

OAP – Choice depends on tier selected. Tier 1 is restrictive like an HMO, while Tier 2 offers more choice.

Referrals for Specialists

HMO – PCP referrals always required to see in-network specialists.

OAP – Tier 1 requires PCP referrals. Tier 2 allows self-referrals to specialists.

Out-of-Pocket Maximums

HMO – Out-of-pocket maximums tend to be higher.

OAP – Maximums vary based on tier used. Tier 1 has higher caps than Tier 2.

Plan Administration

HMO – Utilization management and care coordination is stricter.

OAP – Varies by tier. Tier 1 is tightly managed like an HMO. Tier 2 has fewer restrictions.

Pros and Cons of HMO vs OAP

| | HMO | OAP |

HMO or PPO – which is better for me?


What is the difference between an HMO and an OAP?

An open access HMO differs from a traditional HMO in that it typically allows employees to see in-network specialists without a referral, but still will not cover out-of-network providers other than emergency care. The gist: Open access HMOs are less expensive but more limiting than a PPO.

Is it better to choose PPO or HMO?

HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.

What is the difference between an HMO and an EPO?

Like HMOs, EPOs cover only in-network care. But the networks are generally larger. They may or may not require referrals from a primary care physician. Premiums are higher than HMOs, but lower than PPOs.

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