Understanding the nuances of Medicare Advantage plans is an important part of taking care of your health as an older adult. You may have heard of the terms “HMO” and “PPO” before. In this post, we’ll break down Medicare Advantage plans, the pros and cons of an HMO vs a PPO, and how to choose between them. 

Key takeaways:

  • Medicare Advantage plans offer an alternative to Original Medicare.

  • There are two types of Medicare Advantage plans: HMOs and PPOs. The best plan type for you depends on your unique health and financial needs.

  • HMOs offer better cost savings while PPOs offer more flexibility in choosing your doctors.

What is Medicare Advantage?

Also called Part C, Medicare Advantage plans offer a private alternative to Original Medicare (Part A and Part B). This option for health insurance combines Part A (inpatient hospital coverage) and Part B (outpatient medical coverage).Many Medicare Advantage plans also provide prescription coverage and benefits for vision, dental, and hearing.. These plans often cover more services than Original Medicare, but can be restrictive in a lot of ways. Learn more in this blog post.

What are HMOs and PPOs?

HMOs and PPOs are different insurance plan types that you will find when exploring Medicare Advantage plans. Both HMOs and PPOs have networks, and while PPOs offer more flexibility, HMOs often come with lower out-of-pocket costs.

Health maintenance organizations (HMO)

Health maintenance organizations, or HMOs, are plans that have a network of healthcare facilities and providers. Those enrolled in an HMO are restricted to the network of providers that the plan provides. Although you’ll likely see lower out-of-pocket costs and premiums low, HMOs limit which medical professionals you can see.

Preferred provider organizations (PPO)

In comparison to HMOs, preferred provider organizations, or PPOs, offer more flexibility in choosing healthcare providers. PPO plans have a network of doctors and health facilities where your costs will be lower, but members can receive care outside the network. Because they provide more flexibility, PPOs can be more expensive. 

Pros of Medicare Advantage HMOs

  • HMOs generally have lower premiums and out-of-pocket costs.

  • It’s unlikely you’ll need to file any claims since HMO plans pay providers directly.

Cons of Medicare Advantage HMOs

  • There is no coverage for care from out-of-network providers, so you only have access to a limited network of doctors, hospitals, and services.

  • You must make an appointment with your primary care physician to get a referral to see an in-network specialist. 

Pros of Medicare Advantage PPOs

  • You have greater flexibility in choosing a provider and can go out-of-network.

  • You don’t need to use a primary care physician, and you don’t need a referral for any specialists.

Cons of Medicare Advantage PPOs

  • PPOs have higher premiums. They also often have higher out-of-pocket costs.

  • In some cases, out-of-network providers can result in higher out-of-pocket costs and a separate deductible.

  • You may have to file a claim to get certain services reimbursed. This is more likely if you visit out-of-network providers.

Medicare Advantage plans HMO vs PPO: Which one is right for you?

Choosing the right plan involves a careful consideration of your unique healthcare needs, preferences, and financial circumstances. It’s crucial to weigh the pros and cons of each plan to see what’s best for you. For example, you’ll want to ask yourself what’s more important for your situation — lower premiums and out-of-pocket costs or flexibility in choosing your providers?. 

Talk to one of our licensed Medicare Advisors for personalized advice about Medicare Advantage HMO vs PPO plans. Our licensed Advisors can provide valuable consultation, ensuring you make an informed decision that suits your health and financial well-being. Schedule a free consultation or call us at (855) 900-2427 to get started.

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