PPO and HMO Plans

PPO and HMO Plans: What is the difference?

Medicare Advantage Plans, Part C, are offered through private companies approved by Medicare to manage your coverage for Medicare Part A and Part B. Often, these plans also include vision, hearing, dental, or prescription drug coverage. Two of the most common forms of these companies are the PPO and HMO.

HMO

Health Maintenance Organizations offer HMO plans. Health Maintenance Organization (HMO) plans require you to receive care from providers in the plan’s network. If the service is out of network, you pay the full cost, unless for emergency care, out-of-area urgent care, or out-of-area dialysis. HMO plans require you to have a primary care doctor and require referrals to see specialists for most services. Many plans offer prescription drug coverage. HMO plans have out-of-pocket maximums.

Some advantages of HMOs are that there are lower monthly premiums and lower out-of-pocket costs. There are generally lower costs for prescriptions, and claims do not have to be filed as often because your care is in-network. Having a primary care provider is also convenient to centralize your care. 

Some disadvantages of HMO plans are that you have to stay in-network unless it’s an emergency. If your current provider is not in-network, you will have to pick a new doctor.

PPO

Preferred-Provider Organizations offer PPO plans. Preferred Provider Organization (PPO) plans have you pay more for using the services of doctors, hospitals, and other providers that are out of network. PPO plans cover both in-network and out-of-network providers but keep in mind that you will pay less for services that you receive in-network. 

Many plans offer prescription drug coverage. You can go to any doctor, hospital, or healthcare provider that is in-network and do not need a primary care doctor. You do not need a referral to see specialists, but in-network specialists will be less costly. 

PPO plans have plan-specific premium, an in-network deductible, a drug deductible, copayments, and coinsurance of 20 percent on average, in addition to the Part B deductible. Medicare Advantage plans have out-of-pocket maximums. PPOs may be the better option for those with chronic health conditions for their flexibility in seeing out-of-network specialists. PPOs tend to have higher premiums and out-of-pocket costs. Another disadvantage is that the lack of a primary care doctor means you have more responsibility in coordinating your care.

For more information regarding Medicare Advantage plans, contact Temmen Insurance today.

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