What is the primary difference between HMO and PPO plans?

HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) plans differ primarily in their structure and how members access healthcare services. HMO plans typically require members to select a primary care physician (PCP) and obtain referrals from that PCP in order to see specialists. Furthermore, HMO networks are usually more restrictive, meaning members must use healthcare providers that are part of the HMO's network to receive the full benefits of their insurance.

On the other hand, PPO plans are known for their flexibility. They allow members to see any healthcare provider without needing a referral, and while they encourage the use of network providers through lower copayments, members can also choose out-of-network providers at a higher cost. This flexibility in provider choice is a hallmark of PPO plans, making it easier for members to access a wider range of healthcare services as needed.

The other options discuss aspects that may vary between plans but do not capture the primary distinction in network structure and provider access that sets HMO and PPO plans apart. Therefore, the first choice accurately highlights the core difference between the two types of insurance plans.