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Medicare Advantage: PPO vs. HMO

Dec 18, 2019 3 min read Ben Gran

Medicare Advantage is a different way of getting Medicare coverage that can potentially help you save money on out-of-pocket costs while getting some extra benefits such as dental and vision care. There are two main types of Medicare Advantage plans: PPO (preferred provider organization) and HMO (health maintenance organization). There are a few key differences to keep in mind when deciding between Medicare Advantage PPO and HMO plans.

 

 

Medicare Advantage HMO

If you sign up for a Medicare Advantage HMO plan, there are a few plan features you'll want to be aware of:

  • Network: HMO plans want you to get your care from doctors and hospitals that are in their network of providers. The HMO negotiates prices with these in-network clinics, facilities and health care professionals to help save you money. If you get care from a doctor or provider outside the HMO's network, you might have to pay for the full cost of that care. (These network restrictions do not apply to emergency care or receiving urgent care or dialysis when out of your usual area.)
  • Primary care doctor: An HMO will typically want you to choose a primary care doctor from whom you will have to get referrals to see specialists. If your doctor leaves the HMO plan's network, you would then have to choose another doctor.
  • Prior approvals: The HMO will typically want you to get prior approval before receiving certain medical care or services.
  • Prescription drug coverage: Medicare Advantage HMOs typically provide prescription drug coverage under Medicare Part D, but you will need to read the fine print and understand the details of your specific plan before you sign up.

The goal of the HMO is to give you consistent and cost-effective care from a trusted network of doctors and health care professionals. If you are comfortable staying with a certain doctor or hospital and do not expect to require care that would not be within that network, a Medicare Advantage HMO might be the right choice.

Learn more about Medicare Advantage HMO plans Opens in new window.

 

Medicare Advantage PPO

Another type of Medicare Advantage plan is a Medicare Advantage HMO plan. This preferred provider organization model lets you choose your doctor and can often be more flexible than the HMO model.

Here are some important features of a Medicare Advantage PPO:

  • In network or out of network: You can choose to see doctors and go to hospitals or clinics that are in your PPO's preferred provider network, or you can see doctors who are outside the network. If you go out of network, your co-pays might be higher than if you were to stay in network, but you'll typically still have more flexibility than you would with an HMO plan if you chose an out-of-network provider.
  • No need to choose a primary care doctor: A PPO plan does not require you to choose a primary care doctor.
  • No need for referrals: With a Medicare Advantage PPO, you usually won't need to get referrals to see specialists. You can typically save money on specialist visits by seeing specialists who are in the PPO's network.
  • Prescription drug coverage: Most Medicare Advantage PPOs will offer prescription drug coverage, but it depends on the plan. If you want prescription drug coverage, and you want a Medicare Advantage PPO plan, you must choose a Medicare Advantage PPO plan that also includes prescription drug coverage; you can't get Medicare Advantage and Medicare Part D separately.

In general, Medicare Advantage PPO plans are a bit more flexible than HMOs. If it's important for you to be able to have more flexibility and freedom to see specialists without referrals, and to be able to see different doctors outside of the network, a PPO might be the right choice.

Learn more about Medicare Advantage PPO plans Opens in new window.

Footnotes

 

Ben Gran is a freelance writer based in Des Moines, Iowa. He writes about personal finance, public policy, financial services, technology, and business.

 

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