It’s important to consider and compare the differences between Medicare Advantage HMO and PPO plans. HMO plans typically have lower premiums and less out-of-pocket costs. PPO plans have higher premiums and cost sharing, but greater flexibility to choose your doctor or other health care provider. Show
Fact Checked Our fact-checking process starts with vetting all sources to ensure they are authoritative and relevant. Then we verify the facts with original reports published by those sources, or we confirm the facts with qualified experts. For full transparency, we clearly identify our sources in a list at the bottom of each page. Cite Us APA Turner, T. (2022, October 13). HMO vs. PPO. RetireGuide.com. Retrieved October 17, 2022, from https://www.retireguide.com/medicare/medicare-advantage-plans/coordinated-care-plans/hmo-vs-ppo/ MLA Turner, Terry. "HMO vs. PPO." RetireGuide.com, 13 Oct 2022, https://www.retireguide.com/medicare/medicare-advantage-plans/coordinated-care-plans/hmo-vs-ppo/. Chicago Turner, Terry. "HMO vs. PPO." RetireGuide.com. Last modified October 13, 2022. https://www.retireguide.com/medicare/medicare-advantage-plans/coordinated-care-plans/hmo-vs-ppo/. Why Trust RetireGuide.com Content created by RetireGuide and sponsored by our partners. Key PrinciplesRetireGuide’s mission is to provide seniors with resources that will help them reach important financial decisions that affect their retirement. Our goal is to arm our readers with knowledge that will lead to a healthy and financially sound retirement. We’re dedicated to providing thoroughly researched Medicare information that guides you toward making the best possible health decisions for you and your family. RetireGuide LLC has partnerships with Senior Market Sales (SMS), GoHealth, Tranzact and CoverRight. Our partners are able to be reached through the phone numbers and/or forms provided on our website. The content and tools created by RetireGuide adhere to strict Medicare and editorial guidelines to ensure quality and transparency. Editorial IndependenceWhile the experts from our partners are available to help you navigate various Medicare plans, RetireGuide retains complete editorial control over the information it publishes. We operate independently from our partners, which allows the award-winning RetireGuide team to provide you with unbiased information. Visitors can trust our inflexibility regarding our editorial autonomy. We do not allow our partnership to influence RetireGuide’s editorial content whatsoever. What Are the Differences Between an HMO and PPO?The main differences between Medicare Advantage health maintenance organizations (HMO) and preferred provider organization (PPO) plans are rules that can affect how much you pay and how much flexibility you have in choosing your doctor and other providers. HMO and PPO plans both rely on a network of doctors, hospitals and other health care providers who have agreed to specific prices for health care services. Using these providers will cost you less than going to those who don’t belong to the network. Most HMO and PPO plans provide prescription drug coverage, but you should ask about that before buying a plan. HMO plans can cost you less, but PPO plans give you greater flexibility of your choice of health care providers. HMO Features
PPO Features
Costs: HMOs More Affordable Than PPOsHMO plans are the most popular type of Medicare Advantage plans, accounting for 59% of all Medicare Advantage enrollees in 2022, according to the Kaiser Family Foundation. They are typically more affordable, but come at the cost of flexibility in your health care choices. You are usually limited to a smaller, more localized network of providers and have to seek referrals or prior authorizations for certain medical services. But if cost is your main concern, HMO plans may be a better choice. Average Premiums of Medicare Advantage HMO and PPO Plans (2022)
The Centers for Medicare & Medicaid Services limits the maximum out-of-pocket expenses you have to pay to $7,550 for in-network services and $11,300 for in-network and out-of-network combined in 2022. But maximum out-of-pocket costs are also considerably lower for HMO plans than for PPO plans. Average Annual Out-of-Pocket Limits for HMO and PPO Plans (2022)
Connect With a Medicare Advantage Professional New updates are made every year to Medicare Advantage plans. Find out which plan is right for you. PPOs Have More Flexibility and Less RestrictionsAccording to the Kaiser Family Foundation, 38% of Medicare Advantage enrollees are in PPO plans. PPO plans are the second most popular type of Medicare Advantage plans, largely due to their flexibility in your choice of doctors and other providers. HMO plans require you to name a primary care physician to coordinate all your health care. PPO plans don’t have this requirement and give you greater ability to choose the doctors, specialists and other providers you want, similar to other Medicare plans. PPO plans also give you greater flexibility in choosing a doctor or other provider outside your PPO network. But you may have to pay more for each visit or service. Will You Need A Referral to See a Specialist?You generally will not need a referral if you have a PPO plan. But you will typically pay less if you use specialists in your plan’s network than an out-of-network specialist. This differs from HMO plans which typically require a referral from your primary care physician to coordinate your medical care. Most Medicare Advantage plans may require prior authorization for some expensive services. This is less likely with PPO plans, but you should check with your plan’s administrator to see if you will need prior authorization for certain services. HMO vs. PPO: Finding the Right Plan for YouWhen comparing HMO vs. PPO plans, there are two major considerations to take into account to decide which one is best for you: Your current, individual needs and your future needs. For your current needs, don’t focus on the cost of the monthly premium. You need to weigh your total health care costs. Consider your deductible, copayments and coinsurance costs you’ll have to pay out of your pocket over time. And be aware of the limit a plan puts on your annual out-of-pocket costs. For your future needs, you need to consider whether saving money on monthly premiums now is the wisest choice. Or you may prefer the flexibility of more providers and lower deductibles later. In addition to these considerations, there are other options and contingencies that you need to think about before deciding whether to go with an HMO plan or a PPO. Things to Consider When Choosing Between a PPO and HMO Plan
Last Modified: October 13, 2022 9 Cited Research Articles
What is better PPO or HMO?HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.
What are the advantages of an HMO or PPO for a Medicare recipient?PPO plans share many features with HMO plans. However, PPO plans offer greater flexibility. As with HMO plans, there is a network of Medicare-preferred healthcare service providers that offer lower cost options, but individuals are free to choose a doctor, specialist, or hospital that is not part of the network.
Why would a person choose a PPO over an HMO?A PPO plan can be a better choice compared with an HMO if you need flexibility in which health care providers you see. More flexibility to use providers both in-network and out-of-network. You can usually visit specialists without a referral, including out-of-network specialists.
Is HMO or PPO better for seniors?It's important to consider and compare the differences between Medicare Advantage HMO and PPO plans. HMO plans typically have lower premiums and less out-of-pocket costs. PPO plans have higher premiums and cost sharing, but greater flexibility to choose your doctor or other health care provider.
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