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What is the Difference Between Medicare HMO vs. PPO?

November 9, 2021

What Is the Difference Between Medicare HMO vs. PPO

If you’ve decided to choose a Medicare Advantage plan for your Medicare coverage, it’s important to know what kind of plan you’re working with. Private health insurance plans can be structured in different ways, each with its own requirements.

Two of the most common Medicare Advantage types are Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). In addition, each Medicare Advantage plan will have its own network of doctors and providers.

To get the maximum benefit from your Medicare Advantage plan it’s important to understand these insurance plan structures and how they work. Let’s dive in!

What is a Medicare Advantage HMO Plan?

A Medicare Advantage HMO plan has a medical network of doctors and providers and only provides coverage within that network.

If you want to go to a doctor or provider outside the network, you won’t be able to use your insurance plan unless it’s emergency care, out-of-area urgent care, or out-of-area dialysis.

An HMO also requires you to have a designated Primary Care Provider (PCP) to coordinate your care. Specialist appointments generally require a referral from your PCP and may also require preauthorization from the insurance company as well.

Does a Medicare HMO Plan Replace Original Medicare?

A Medicare Advantage Plan HMO is an alternative to Original Medicare. All Advantage plans must offer at least as much coverage as Original Medicare, and many offer additional benefits as well.

What is a Medicare HMO Risk Plan?

An HMO Risk Plan is a type of health insurance arrangement that an insurance company makes with the government. The insurance company agrees to provide medical services to each member of the plan, and the government pays the insurance company a flat fee per enrollee.

Most Medicare Advantage HMOs operate this way. A few get reimbursed from the government based on actual costs, but most get a flat fee per member.

What is a Medicare HMO-POS Plan?

HMO-POS stands for “Health Maintenance Organization - Point of Service.” These are hybrid plans that allow members to get some coverage for medical care outside the HMO network. If you use out-of-network care, you will pay more than you would for normal in-network benefits.

An HMO-POS still requires you to have a PCP coordinate your care, but you may not need a referral to see a specialist. However, getting a referral may allow you to get coverage more quickly. You may still have to preauthorize some services with the insurance company.

With an HMO-POS, there are separate deductibles for the in-network (HMO) and out-of-network (POS) parts of the plan.

What is a Medicare Advantage PPO Plan?

What is the difference between an HMO and PPO? In a Preferred Provider Organization (PPO) plan, you have more choices in your medical care. However, you may pay a higher monthly premium for these types of plans.

A PPO still has a medical provider network and you may pay less for medical services within the network. However, you can receive care outside the network as well. You don’t have to choose a PCP to coordinate your care, although it may still help you to have a single provider who understands all of your needs.

You won’t need a referral to see a specialist, but you’ll need to set up specialist appointments yourself. You also won’t need insurance authorization for services provided outside the medical provider network. Finally, there’s only one deductible for the whole plan, rather than separate ones for in-network and out-of-network care.

When choosing a plan, it’s important to compare Medicare Advantage PPO vs HMO plans. That way you can get the coverage you need with a premium you can afford.

Pros and Cons of PPOs and HMOs


Medicare HMOA Medicare HMO has lower monthly premiums while providing a strong level of care and benefits. You get a dedicated doctor coordinating your care and may pay less for medical services because everything is provided within the network.Medicare HMOs limit care to the network only, so if you are traveling, you can only receive emergency care. You also have to get referrals to see a specialist and need to preauthorize certain services before they will be covered.
Medicare PPOMedicare PPOs generally allow you to see whomever you would like without a referral or preauthorization. You don’t have to stick to one PCP, and you can receive medical services outside the provider network.Medicare PPOs are more expensive in terms of a monthly premium and there may be fewer plan options available in your area. You may have higher out-of-pocket costs for care outside the network and may pay more overall than you would with an HMO.


Get Expert Assistance on Your HMO and PPO Options

Now that you understand the general differences between Medicare PPOs and HMOs, you might wonder “Is Original Medicare a PPO or HMO?” The truth is it isn’t either one. Original Medicare uses a nationwide network of participating doctors and doesn’t require a PCP or preauthorization. If you get care from a doctor that’s opted out of Medicare, you’ll need to pay the full price out-of-pocket.

Choosing the right plan can be challenging, but it’s much easier when you have a licensed agent helping you understand your options. If you’d like to compare plans or have more questions, we’re here to help. Simply contact us today!

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