There is one universal truth when it comes to your health: you need to take care of it. Thankfully, there’s a lot of different healthcare insurance plans for you to consider. And each will vary in the type of coverage they offer and what you can expect to pay.
Today, we're taking a closer look at the difference between Medicare HMO and PPO plans. We'll explore the benefits, deductibles and overall costs of each to help you choose which best fits your healthcare needs. Ready? Let's get started.
Comparing HMO and PPO Plans
Before you consider if an HMO or a PPO is best for you, it's important to understand the difference between the two. Medicare HMO (Health Maintenance Organization) plans provide coverage through a network of healthcare providers. They usually have lower out-of-pocket costs but require you to choose your care within the plan’s network.
On the other hand, Medicare PPO (Preferred Provider Organization) plans allow you to see specialists without a referral and choose a doctor that’s out of network. They typically have a higher premium and copay, but let you choose from a wider range of health care providers. So basically, you're paying a bit more for the flexibility of a larger network.
We've put together an easy-to-understand comparison chart that shows some of the key differences between Medicare HMO and PPO plans.
Medicare HMO vs. Medicare PPO Comparison
| Medicare HMO | Medicare PPO | |
|---|---|---|
| Do I need to pick a primary care physician (PCP)? | Yes With most HMO plans, your services are coordinated by your chosen PCP |
No PPO plans don’t require a designated PCP |
| Do I need a referral to see a specialist? | Yes Typically, you will need your PCP to give you a referral to an in-network specialist |
No PPO plans don't require a referral for any services |
| Can I see a doctor anywhere in the U.S.? | No Unless it’s an emergency, HMO plans only offer coverage for in-network providers |
Yes PPO plans give you the flexibility to see providers out of network, but additional costs may apply |
| Do I hae to file my own claims? | No You usually won’t need to file a claim |
Varies by plan With some PPO plans, you need to pay for services directly and then file a claim for reimbursement |
| Do I need standalone drug coverage? | No You generally don’t need standalone drug coverage with an HMO plan that includes Part D |
Varies by plan Some PPO plans offer prescription drug coverage as part of their plans, while others require you to enroll in Part D |
| Overall cost | Lower HMO plans typically have a lower monthly premium and fewer out-of-pocket costs |
Higher PPO plans usually have higher premiums and out-of-pocket costs |
Once you start to understand how each plan works, you’ll be able to choose which works better with your healthcare needs and budget considerations.
Which Plan is Right for Me?
So, how do you decide which plan is right for you? Ultimately, the “right” option really depends on your individual circumstances. Where you live, your choice of doctor, and how much you can spend each month will all impact your decision. Ask yourself these questions:
“Do I like to travel?”
If you’re someone who travels a lot – either for business or pleasure – you may appreciate the out-of-network flexibility a PPO can offer. But if you’re someone who typically stays close to home, an HMO may be a more cost-effective option.
“Is my doctor in-network?”
If your current primary care physician is in-network, an HMO would help you save money. But if they’re not and you want to keep them, a PPO gives you the ability to see them out-of-network.
“Do I need a lower monthly budget?"
If your budget is limited, HMO plans typically have a lower monthly premium as well as fewer out-of-pocket costs.
“What are my current healthcare needs?”
If you’re dealing with complex medical needs, a PPO would let you choose from a wider range of specialists and providers. If you receive most of your care from a PCP that is in-network, an HMO may be a good option for you.
Regardless of whether you choose an HMO or a PPO, it's important to review the specific details of each plan. Consider the provider network, coverage for out-of-network services, and additional benefits. That way, you’ll make sure you’re getting a plan that best aligns with your healthcare needs and preferences.
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More About Medicare Advantage
- What Is a Medicare Advantage Plan?
- What Is a D-SNP? Understanding Dual Special Needs Plans
- Dual Eligible Special Needs Plans (D-SNPs): Frequently Asked Questions (FAQs)
- What Is a PPO?
- What Is an HMO?
- Medicare Advantage vs. Original Medicare
- What Is the Medicare Advantage Open Enrollment Period (MA OEP)?
