Medicare HMO vs. PPO:
What’s best for you?
Medicare Advantage (Part C) plans are an excellent option for people who want an all-in-one plan that offers more coverage than Original Medicare (Parts A and B). The two main types of Advantage plans, Medicare HMO and PPO plans.
Having these options allows you to choose the type of Medicare Advantage plan that best fits your priorities based on two key factors: cost and flexibility to see the doctors of your choice.
What is an HMO and PPO?
HMO
HMO (Health Maintenance Organization) plans typically have lower out-of-pocket costs but require you to choose care within the plan’s network.
PPO
PPO (Preferred Provider Organization) plans may have higher premiums and copays but offer greater flexibility to see a wider range of health care providers.
Provider Networks: What You Need to Know
A network is the specific list of doctors, hospitals, and other health care providers contracted by a Medicare Advantage insurance company to ensure lower negotiated rates. A plan’s network can be determined by both geography and preferred providers.
Understanding a plan’s network is important to ensure that you get the coverage you need. If you’re unsure, you can visit a plan’s website to check if a particular doctor or facility is in their network. See if your current doctors are part of the Blue Cross Blue Shield of Massachusetts network.
Medicare HMO vs. PPO: The Key Differences
| HMO | PPO | |
|---|---|---|
| Out-of-pocket costs | Often have no or lower monthly premiums and lower out-of-pocket costs. | Monthly premium, if there is one, and out-of-pocket costs are generally higher. |
| Flexibility to get health care where I want | Must get health care from providers and facilities within the plan’s network, except in emergencies. | Can choose out-of-network hospitals and doctors, but they may cost more. |
| Need for a primary care physician | Need a primary care doctor within the plan’s network of approved providers. | Can choose any doctor that takes Medicare. |
| Specialty care referrals | Need a referral for most specialty care, such as a cardiologist. | Don’t need a referral for specialty care. |
In addition to basic health care coverage, both HMO and PPO plans are Medicare Advantage plans, so they are likely to offer a range of additional benefits, such as prescription drug benefits, vision, dental and hearing coverage, and more.
Medicare HMO vs. PPO: What to Consider
Here are four questions to ask yourself when choosing between a Medicare HMO and PPO Plan:
Do I already have doctors I like?
Check if your doctors are part of a plan’s provider network. If they are, you should be good with either a Medicare HMO or PPO plan. But if your doctors are not part of the network, you might want to choose a PPO plan.
Do I want the flexibility to see a different doctor or go to a different medical center that’s been recommended to me?
If you don’t mind sticking with the doctors and hospital options in a plan’s network, then an HMO plan could be the right choice for you. If you want the option of choosing a different doctor or medical center/hospital — even if it is not in the plan’s network — then a PPO might make more sense for you.
Do I plan on traveling a lot?
If so, you may prefer the flexibility you get with a PPO plan. A PPO plan offers coverage for doctors and hospitals outside your preferred provider network (although your out-of-pocket costs may be higher than with an in-network provider). If you plan on typically staying close to home, an HMO may be a more cost-effective option.
Are lower costs more important than flexibility?
If it’s more important for you to keep your costs low, and you don’t need the flexibility of a PPO plan, you might prefer an HMO plan. HMO plans tend to have lower out-of-pocket costs, low or no deductibles and low or no copays.
A Medicare HMO-POS Plan Offers a Combination of Benefits
Another option is a Point of Service (POS) plan, which combines the benefits of a Medicare PPO and HMO plan.
Can see doctors and hospitals outside of the plan’s network (for some services), but deductibles and copays may be higher
Still need a primary care doctor within the plan’s network
May or may not require referrals for specialty care
Total out-of-pocket costs are typically higher than an HMO but lower than a PPO
Watch this short video to help figure out which type of plan is right for you.
What type of Medicare plan is right for me?
Read transcripts
With so many different types of Medicare plans and different providers, choosing the right plan can seem complicated. But before you start looking, you need to ask yourself these questions.
One, how often do you see a doctor or specialist. Two, if you take prescription medicine, what kind do you take and how much. Three, would you be willing to switch doctors if it meant lower costs for you. And four, will you be traveling regularly. Keep your answers to these questions in mind as you begin to look at different Medicare plans.
Here are some other factors you should keep in mind as you compare plans. The first is cost, but don't just look at the monthly premium. Be sure to factor in other out-of-pocket expenses you'll pay throughout the year, like deductibles and copays. Next, look at plan benefits. Does the plan come with routine eye exams? What about dental benefits? If it's important for you to be able to keep your current doctors, check the plans network to make sure they are part of it. How much flexibility do you need with healthcare choices? If you travel a lot, you'll need a plan that covers you in areas other than right where you live. If you take prescription drugs, you'll want to see if your particular drugs are covered, and find out what the copay would be for them. Can you use any pharmacy you want? If not, does the plan's network include pharmacies near you? Finally, consider the reputation of the provider. How much experience do they have providing Medicare coverage? If you speak to a sales rep, do they seem well-informed and helpful?
These seven factors can help guide you as you navigate through your Medicare choices. But remember, even if you wind up not being happy with your choice, you will have opportunities to change your plan every year.
Still have questions about which plan is right for you? Our Medicare experts can help guide you in the right direction. Give us a call at 1-800-678-2265.
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