HMO and PPO Labels are Poor Indicators of Provider Networks and Prices
David Muhlestein, Elvira Makk FridAbstract
Introduction
Commercial insurance is commonly organized around health maintenance organization (HMO) and preferred provider organization (PPO) products. HMOs are often associated with narrower, less expensive networks, but this assumption has been difficult to test. We examined whether these labels correspond to differences in provider networks and negotiated prices within insurers.
Methods
We analyzed 2026 Q3 Transparency in Coverage data from commercial insurers whose network or plan names identify both an HMO and a PPO network. We compared provider-network overlap and negotiated prices for identical provider-service combinations. Insurers were grouped by whether HMO and PPO products differed in network breadth, prices, both, or neither.
Results
Of the 30 insurers, 14 had identical networks and prices, 13 of them using a single network for both products, while 8 had differences in both. Across 90.4 million within-provider comparisons, 71.5% of negotiated rates were identical, 22.6% had higher PPO rates and 5.9% had higher HMO rates.
Conclusions
HMO and PPO labels do not consistently identify differences in network breadth or negotiated rates, and many insurers do not use the labels at all. For many insurers, product differences may instead reflect benefit design, which this study did not measure.