If you’re reading this, chances are you’ve decided to enroll in a Medicare Advantage plan. You’ve also probably realized that your decisions have just begun! There are several kinds of Medicare Advantage plans, and it’s very important that you understand their differences as they will impact how you receive care and how much you pay for services.
Two of the most popular kinds of Medicare Advantage plans are PPO and HMO plans. PPO stands for Preferred Provider Organization and HMO stands for Health Maintenance Organization. We’ll tell you about a few of the key differences between these two plans so that you can decide which one is right for you.
Medicare Advantage HMO Plans
A Medicare Advantage HMO plan works similarly to a traditional HMO insurance plan. If you’re familiar with the latter, you’ll have no trouble understanding how a Medicare Advantage HMO plan works.
Every Medicare Advantage plan is different, but for the purposes of this article, we’re going to talk in general terms. You may have a plan in your area that does not follow these exact rules, but by reading this, you’ll know what to look for. The same will be true when we talk about PPO plans a little later.
HMO plans usually have the lowest premiums, deductibles, coinsurance costs, copayments, and maximum out-of-pocket caps. Beneficiaries often see those lower numbers and wonder why they would choose any other plan. But of course, those low expenses come at a price.
To keep costs low, HMO plans implement a few rules. First are foremost, know that you will have to see contracted providers. HMO plans do not offer any coverage outside of the plan’s network except in emergency situations. This restriction limits which providers you can see, and you may be forced to switch a provider you’ve had for years. This can also be complicated if you have a team of providers that work together. Remember that you must check the network status of each individual provider.
You should also be wary of this network restriction if you are someone who travels frequently. While most plans now offer nationwide reciprocity, which means that you can still see contracted providers outside of your region, the overall pool of those providers will be much smaller than they are under PPO plans. If you travel to rural areas, you may run into problems finding an HMO provider.
Most HMO plans also require you to choose a primary care provider (PCP) who will coordinate all of your care. The idea behind this is that it ensures someone on your care team has a complete picture of your health. The only problem this creates is that if you’d like to see a specialist, you’ll have to get a referral from your PCP first. This delays treatment and adds an extra cost.
Now that you have an idea of how Medicare Advantage HMO plans work let’s turn to the PPO option.
Medicare Advantage PPO Plans
Medicare Advantage PPO plans have generally higher costs than HMO plans. However, you may find that some services aren’t that much more expensive on a PPO plan. For example, there are many HMO and PPO plans that have $0 monthly premiums. Both may even have low (or no) copays to see your primary care physician. But, speaking in general terms, PPO plans have higher costs. You may notice this, especially when it comes to the Maximum Out-of-Pocket (MOOP). The MOOP is the most you’ll pay for covered services during a calendar year. For example, an HMO may have a MOOP of $2,000, but a PPO option’s MOOP may be $4,000. Once you hit that amount, all covered services are paid 100% by the plan.
The advantage of these slightly higher costs is that they give you more freedom. PPO plans also use provider networks, but they do offer coverage outside of the network. The caveat is that you might pay more to use non-contracted providers. For example, an in-network PCP may cost $10 per visit, but an out-of-network PCP may cost $25 per visit.
As we mentioned earlier, there are more providers enrolled in PPO plans than there are in HMO plans. This automatically means that you’ll have more providers to choose from (even inside the network) if you enroll in a Medicare Advantage PPO plan.
PPO plans do not require you to choose a primary care provider, nor do you need to get a referral prior to seeing a specialist.
Choosing the Best Medicare Advantage Plan
Still not sure which Medicare Advantage plan is best for you? That’s what we’re here for! The team at Carolina Senior Benefits will help you weigh the pros and cons of all your options so that you can decide which Medicare plan is right for you. We offer opinion-free, customized recommendations based on your needs.
All of our services are complimentary. Call today to speak with a Medicare advisor near you!
