Fair Square Medicare Wordmark

What's the Difference Between HMO and PPO Plans?

A cartoon signpost with HMO and PPO pointing in opposite directions
By Daniel Petkevich
Dec 1, 2022

HMO or PPO: Which Medicare Health Plan Is Right for You?

Stay Up to Date on Medicare!

Join the Fair Square Medicare Newsletter to stay informed on cost savings, changes to Medicare, and other valuable healthcare information.
While there are several good health plans to choose from, the two most popular options include HMO (Health Maintenance Organization) and PPO (Preferred Provider Organization) plans.
What exactly do these plans have to offer? How do they differ in terms of coverage?
Keep reading to find out. We'll answer all your questions about HMOs and PPOs so you can decide which health plan is best for you.

What's an HMO Plan?

An HMO (Health Maintenance Organization) plan is one type of Medicare Advantage health plan. HMOs have a specific network of doctors and hospitals. To get coverage, you must receive medical care within this network.
Here's what to expect if you enroll in an HMO plan:
  • No coverage outside your network (except for emergency care)
  • Low monthly premiums and deductibles
  • You have to select a primary care physician (PCP) to manage your healthcare needs
  • Your PCP must write a referral for you to visit a specialist
  • Prescription drugs are only covered if you're enrolled in an HMO plan with prescription drug coverage (and you must order these drugs from pharmacies within your network)
  • Your network covers only one laboratory provider for lab work (e.g., blood draws and urine tests)

What's a PPO Plan?

A PPO (Preferred Provider Organization) plan is another type of Medicare Advantage plan. PPOs also have a network of doctors and hospitals, but they don't require you to stay within the network. However, you will likely have to pay more to go outside the network.
Here's what to expect if you enroll in a PPO plan:
  • Coverage both inside and outside your network (Note: Copays and out-of-pocket costs might be higher for out-of-network providers)
  • Higher monthly premiums
  • You don't need to select a PCP
  • You don't need PCP referrals to see a specialist
  • Prescription drugs are only covered if you're enrolled in a PPO plan with prescription drug coverage. (You can order prescription drugs from any pharmacy, but choosing pharmacies within your network might be cheaper)
  • You have more coverage options for your lab work

What Are the Differences Between an HMO and PPO Plan?

HMO and PPO plans differ when it comes to:
  • Provider networks (in-network limitations and out-of-network coverage)
  • Costs (premiums)
  • PCP requirements
  • Expectations for filing reimbursement claims
Let's look at these differences in more detail.

HMO vs. PPO: Provider Networks

Both HMO and PPO plans have specific networks of hospitals and doctors. But they differ in terms of network coverage.
HMO plans:
  • Provide coverage only when you visit an in-network doctor (i.e., they don't cover visits to out-of-network providers)
  • Have in-network limitations for lab work and prescription drugs. You'll need to stick to labs and pharmacies within the network to get coverage for your blood tests, urine tests or prescription drugs
PPO plans:
  • Provide coverage even when you see a doctor outside the network (Note: You might have a higher copay for out-of-network visits)
  • Don't have in-network limitations for lab work and prescription drugs

HMO vs. PPO: Costs

The costs will vary depending on which plan you sign up for. But the following points might indicate patterns of what you could expect to pay.
HMO plans:
  • Low premiums
  • Low (or no) deductibles
  • Only require a copay when you receive healthcare services
PPO plans:
  • High monthly premiums
  • Include deductibles, copays, and coinsurance when you receive healthcare services


HMO plans:
  • Require you to select a primary care physician (PCP) from within the network
  • Require a referral from your PCP to consult a specialist
  • Cover specialist consultations only when you have a referral
PPO plans:
  • Don't require you to have a PCP
  • Let you visit any doctor (or specialist) without a referral

HMO vs. PPO: Filing Claims

HMO plans:
  • Don't require you to file a claim (since your healthcare services only come from in-network providers)
PPO plans:
  • Ask that you pay out-of-network providers directly and then file a claim for reimbursement

Which Health Plan Fits for Me?

The right health plan for you totally depends on your needs. Let's run through a few scenarios:
  • You're in good health — HMO
    • If you have no major health issues and your favorite doctor is within the network, choose an HMO.
  • You're looking for an affordable plan — HMO
    • HMO plans might have lower monthly premiums and sometimes have zero deductibles.
  • You travel a lot — PPO
    • A PPO plan is best for frequent travelers since it doesn't limit you to only in-network providers. You can visit any doctor outside the network, even when you're away from home.
  • You live in a rural area — PPO
    • A PPO plan is a good option if you live in a rural area with very few doctors within your network.

Fair Square Medicare Can Help You Decide Which Plan Meets Your Needs

If you're trying to decide between an HMO and a PPO plan, start by comparing their out-of-network coverage, costs, PCP requirements, and expectations for filing reimbursement claims. You should also consider factors like location, personal health, traveling frequency, and budget.
If you feel stuck, our team at

Fair Square Medicare

is here to help. We know the ins and outs of each


plan and have helped many people choose a plan that's right for them. Give us a call at 1-888-376-2028.

Stay Up to Date on Medicare!

Join the Fair Square Medicare Newsletter to stay informed on cost savings, changes to Medicare, and other valuable healthcare information.

Recommended Articles

Cover image
Will Medicare Cover it?
Oct 3, 2023
Pre-Existing condition stock image
Can Medicare Advantage Plans Deny Coverage for Pre-Existing Conditions?
Mar 28, 2023
Cover image
Why You Should Keep Your Medigap Plan
Sep 21, 2023
Kidney stone stock image
Does Medicare Cover Kidney Stone Removal?
Nov 23, 2022
Leg bones and knees, 3d rendering. stock photo
Does Medicare Cover Fosamax?
Nov 30, 2022
Cover image
The Fair Square Bulletin: October 2023
Oct 2, 2023
senior man reaching to his ear with jumbled letters going into the ear stock image
Does Medicare Cover Hearing Aids?
Nov 9, 2022
Myelofibrosis stock image
Does Medicare Cover Jakafi?
Dec 12, 2022
senior man with his glasses in his hand working in front of his laptop stock photo
Can I Change Medicare Advantage Plans Any Time? | Medicare Plans
Sep 19, 2022
Hands of doctor or nurse in medical gloves injecting a shot to a man patient stock photo
Does Medicare Pay for Allergy Shots?
Nov 29, 2022
Hepatitis C stock photo
Does Medicare Cover Hepatitis C Treatment?
Nov 22, 2022
senior african american man feeling pain in his knees from arthritis while on a couch stock photo
How Much Does Xeljanz Cost with Medicare?
Jan 25, 2023
Cover image
Does Medicare Cover Cold Laser Therapy (CLT)?
Jun 14, 2023
Senior person holding tissue roll near a toilet bowl, using walker to walk to the bathroom stock photo
Is Emsella Covered by Medicare?
Nov 21, 2022
woman in a hospital wearing a bandana being shown information by her doctor stock photo
Medicare Advantage Plans for Disabled People Under 65
Mar 24, 2023
Electrocardiograph with pacemaker stock photo
How Much Does a Pacemaker Cost with Medicare?
Nov 21, 2022
Cover image
Is Fair Square Medicare Legitimate?
Jul 27, 2023
older man suffering from stomach pain due to IBS stock photo
Does Medicare Cover Xiafaxan?
Jan 19, 2023

More of our articles

13 Best Ways for Seniors to Stay Active in Columbus

13 Best Ways for Seniors to Stay Active in Phoenix

14 Best Ways for Seniors to Stay Active in Washington, D.C.

15 Best Ways for Seniors to Stay Active in Denver

Can Doctors Choose Not to Accept Medicare?

Can I Have Two Primary Care Physicians?

Can I Laminate My Medicare Card?

Do All Hospitals Accept Medicare Advantage Plans?

Do I Need Medicare If My Spouse Has Insurance?

Do You Need Books on Medicare?

Does Medicare Cover Bladder Sling Surgery?

Does Medicare Cover Breast Implant Removal?

Does Medicare Cover Cardiac Ablation?

Does Medicare Cover Cervical Disc Replacement?

Does Medicare Cover Diabetic Eye Exams?

Does Medicare Cover ESRD Treatments?

Does Medicare Cover Geri Chairs?

Does Medicare Cover Home Heart Monitors?

Does Medicare cover Hyoscyamine?

Does Medicare Cover Ilumya?

Does Medicare Cover Incontinence Supplies?

Does Medicare Cover Inqovi?

Does Medicare Cover Krystexxa?

Does Medicare Cover LVAD Surgery?

Does Medicare Cover Medical Marijuana?

Does Medicare Cover Mental Health?

Does Medicare Cover Mouth Guards for Sleep Apnea?

Does Medicare Cover Orthodontic Care?

Does Medicare Cover Qutenza?

Does Medicare Cover Robotic Surgery?

Does Medicare Cover RSV Vaccines?

Does Medicare Cover Scleral Lenses?

Does Medicare Cover SIBO Testing?

Does Medicare Cover Stair Lifts?

Does Medicare Cover the Urolift Procedure?

Does Medicare Cover Urodynamic Testing?

Does Medicare Cover Vitamins?

Does Medicare Pay for Funeral Expenses?

Does Medicare pay for Opdivo?

Does Retiring at Age 62 Make Me Eligible for Medicare?

Everything About Your Medicare Card + Medicare Number

Fair Square Client Newsletter: AEP Edition

Finding the Best Dental Plans for Seniors

Finding the Best Vision Plans for Seniors

How Are Medicare Star Ratings Determined?

How Do Medigap Premiums Vary?

How Does Medicare Cover Colonoscopies?

How Medicare Costs Can Pile Up

How Much Does Open Heart Surgery Cost with Medicare?

How Much Does Rexulti Cost with Medicare?

How Much Does Trelegy Cost with Medicare?

How Often Can I Change Medicare Plans?

How to Become a Medicare Agent

How Your Employer Insurance and Medicare Work Together

Is Balloon Sinuplasty Covered by Medicare?

Is Gainswave Covered by Medicare?

Is HIFU Covered by Medicare?

Is PAE Covered by Medicare?

Medicare & Ozempic

Medicare 101

Medicare Consulting Services

Plan G vs. Plan N

Seeing the Value in Fair Square

The Easiest Call You'll Ever Make

Top 10 Physical Therapy Clinics in San Diego

Welcome to Fair Square's First Newsletter

What Happens to Unused Medicare Set-Aside Funds?

What If I Don't Like My Plan?

What Is Medical Underwriting for Medigap?

What is the 8-Minute Rule on Medicare?

What is the Medicare ICEP?

Will Medicare Cover Dental Implants?

Your Medicare One-Stop-Shop

Your guide to Medicare Parts A & B, Medicare Advantage, and Medigap. 100% free.
Get the Fair Square Bulletin

Medicare savings tips, helpful guides, and more.


Medicare 101

Current Clients

Medicare Supplement Plans

Medicare Advantage Plans

Fair Square 2023

Terms of Use
Notice of Privacy Practices

Virgil Insurance Agency, LLC (DBA Fair Square Medicare) and www.fairsquaremedicare.com are privately owned and operated by Help Button Inc. Medicare supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. This is a solicitation of insurance. A licensed agent/producer may contact you. Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal disease. Virgil Insurance Agency is a licensed and certified representative of Medicare Advantage HMO, HMO SNP, PPO, PPO SNP and PFFS organizations and stand-alone PDP prescription drug plans. Each of the organizations we represent has a Medicare contract. Enrollment in any plan depends on contract renewal. The plans we represent do not discriminate on the basis of race, color, national origin, age, disability, or sex. Plan availability varies by region and state. For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov. © 2022 Help Button Inc

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.