A Health Maintenance Organization (HMO) is a type of managed care plan that typically requires policyholders to choose a primary care physician (PCP) who manages their healthcare and refers them to specialists within the HMO network when necessary. HMOs generally have lower out-of-pocket costs than other types of health insurance plans but may have more restrictions on healthcare providers and services. In contrast, a Preferred Provider Organization (PPO) is a type of fee-for-service health insurance plan that allows policyholders to choose their healthcare providers and receive treatment without prior approval from the insurance company. PPOs typically have higher out-of-pocket costs than HMOs but offer more flexibility in terms of healthcare providers and services. When choosing between an HMO and a PPO, consider your healthcare needs, budget, and preferences for healthcare providers and services.