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HMO vs. PPO What Is the Difference?

You might have faced the HMO vs. PPO* (Health Maintenance Organization vs. Preferred Provider Organization) decision if your employer offered a choice of these types of group health insurance plans. Now that you’re planning for Medicare, you might have a similar choice if you decide to get coverage through Medicare Advantage. Let’s take a closer look at HMO vs. PPO Medicare Advantage plans to fully understand the differences.

Medicare Advantage HMO vs. PPO plans: how they’re alike

Both Medicare Advantage HMO plans and Medicare Advantage PPO plans are offered through the Medicare Advantage program (Medicare Part C). Here are some other “HMO vs. PPO” similarities:

  • They’re available through private insurance companies that contract with Medicare.

  • Both deliver your Medicare Part A (hospital insurance) and Part B (medical insurance) benefits. Hospice benefits are the one exception – those come directly through Medicare Part A instead of through the plan

  • Both typically use provider networks

  • They usually include prescription drug coverage and may have preferred pharmacy networks.

  • Like any Medicare Advantage plan, both require you to have Medicare Part A and Part B, and to live within the plan’s service area.

Medicare Advantage HMO vs. PPO plans: how they’re different

Medicare Advantage HMO plans and PPO plans are probably more alike than different. But there are a few “HMO vs. PPO” contrasts:

  • Although they generally have provider networks, Medicare Advantage PPOs let you see doctors outside the plan network. You might have to pay higher coinsurance or copayments for seeing out-of-network providers.

  • You don’t have to choose a primary care provider with a Medicare PPO, but you do with an HMO.

  • If you want to see a specialist, an HMO generally requires you to get a referral. A PPO typically lets you see a specialist without a referral.

Although Medicare Advantage PPO plans may offer more flexibility, your costs (such as the monthly premium) are generally higher under a PPO.

You might need to take a more active role in care coordination in a PPO plan. For example, if you see providers outside the Medicare Advantage PPO plan’s network, you may have to give information about the medical care you have received and your prescription drugs to doctors who treat you.

With any type of Medicare Advantage plan, you’ll need to keep paying your Medicare Part B monthly premium, as well as any premium the plan might charge.

*Out-of-network/non-contracted providers are under no obligation to treat Preferred Provider Organization (PPO) plan members, except in emergency situations. For a decision about whether the plan will cover an out-of-network service, you or your provider are encouraged to ask for a pre-service organization determination before you receive the service. Please call the plan’s customer service number or see your Evidence of Coverage for more information, including the cost sharing that applies to out-of-network services.

The pharmacy network, and/or provider network may change at any time. You will receive notice when necessary.

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