The biggest difference between a Medicare Advantage HMO and PPO is how each plan handles provider networks and out-of-network care.
An HMO generally requires you to use doctors and hospitals in the plan’s network for non-emergency care.
A PPO generally lets you receive covered services from out-of-network providers, but you’ll usually pay more.
HMO plans also usually require a primary-care doctor and specialist referrals, while PPOs generally don’t.
HMO vs. PPO at a Glance
Medicare Advantage HMO
In-network care: Generally required
Out-of-network care: Generally not covered except certain situations
Primary-care doctor: Usually required
Specialist referral: Usually required
Emergency care: Covered under applicable Medicare rules
Medicare Advantage PPO
In-network care: Lower cost
Out-of-network care: Generally permitted for covered services at higher cost
Primary-care doctor: Generally not required
Specialist referral: Generally not required
Emergency care: Covered under applicable Medicare rules
HMO stands for:
With most Medicare Advantage HMOs, you generally need to receive non-emergency healthcare from the plan’s network.
Exceptions include:
Some HMO Point-of-Service plans allow certain out-of-network services at a higher cost.
PPO stands for:
Preferred Provider Organization
A Medicare Advantage PPO has a network of preferred providers.
You generally pay less when you stay in network.
You can usually obtain covered services from qualifying out-of-network providers, but you’ll normally pay more.
Do HMOs Require Referrals?
Usually.
Most Medicare Advantage HMOs require a referral before seeing certain specialists.
Do PPOs Require Referrals?
Generally no.
That’s one reason some people prefer the flexibility of a PPO.
Be careful with that statement.
PPO plans generally allow out-of-network covered care, but you need to make sure:
Both HMO and PPO Medicare Advantage plans may require prior authorization for certain services or supplies.
Network flexibility and prior authorization are two separate issues.
Medicare Advantage HMO vs. PPO
If someone is considering Medicare Advantage, I usually prefer that they understand the network before they look at the extra benefits.
An HMO may have attractive premiums and benefits, but you need to be comfortable staying inside its network.
A PPO gives you more flexibility, but out-of-network doesn’t mean “free choice at the same price.”
You can pay considerably more.
Before enrolling, I want people checking:
Primary doctor
specialists
hospital
and any major medical center they would want access to if something serious happened.
Medicare Advantage plans cover Medicare-covered cancer treatment, including qualifying chemotherapy, but plan networks, prior authorization rules and out-of-pocket costs can become especially important when someone has cancer.
Medicare’s Annual Enrollment Period, also commonly called Medicare Open Enrollment, runs, October 15 through December 7 each year.
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