What's the Difference Between HMO and PPO Plans?
Fair Square Medicare

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?

When you enroll in a Medicare Advantage Plan, you also have to choose a health plan.

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 vs. PPO: PCP

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 Medicare 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.


Learn More About Medicare

heart surgery stock image

How Much Does Open Heart Surgery Cost with Medicare?

2023-01-27

senior african american man feeling pain in his knees from arthritis while on a couch stock photo

How Much Does Xeljanz Cost with Medicare?

2023-01-25

Doctor talking to patients are explaining the treatment of a patient's illness stock photo

How Much Does Rexulti Cost with Medicare?

2023-01-24

Human hands holding healthy lung shape made from paper on light blue background. stock photo

How Much Does Trelegy Cost with Medicare?

2023-01-24

Female physiotherapist helping elderly man in wheelchair do exercises with dumbbells at health center stock photo

What Does Medicare Cover for Stroke Patients?

2023-01-20

Doctor demonstrating upper cervical spine anatomy stock photo

Does Medicare Cover Cervical Disc Replacement?

2023-01-20

Medicare Set Aside funds stock image

What Happens to Unused Medicare Set-Aside Funds?

2023-01-20

older man suffering from stomach pain due to IBS stock photo

Does Medicare Cover Xiafaxan?

2023-01-19

senior woman doing botox stock photo

Is Botox Covered by Medicare?

2023-01-19

Health insurance form on a table with pen, calculator and glasses stock image

What You Need to Know About Creditable Coverage

2023-01-18

Acute psoriasis on elbows is an autoimmune incurable dermatological skin disease stock photo

Does Medicare Cover Light Therapy for Psoriasis?

2023-01-17

wart on the sole of a white man's foot stock photo

Does Medicare Cover Wart Removal?

2023-01-17

woman sitting on sofa feeling pain in her foot at home stock photo

Does Medicare Cover Qutenza?

2023-01-13

Nasal spray stock image

Can Medicare Help with the Cost of Tyrvaya?

2023-01-12

Gloved hands with a scalpel begin a knee replacement surgery

Does Medicare Cover Iovera Treatment?

2023-01-11

A doctor with a clipboard consults a female patient with cancer

Does Medicare Cover Inqovi?

2023-01-11

Physiotherapist showing workout record on exercise bike

Does Medicare Cover Exercise Physiology?

2023-01-11

A women's restroom sign that has been modified to show the stick figure woman needing to use the toilet

Does Medicare Cover Bladder Sling Surgery?

2023-01-11

Your Medicare One-Stop-Shop

Your guide to Medicare Parts A & B, Medicare Advantage, and Medigap.

100% free.

Fair Square Medicare

LEGAL

Privacy Policy

CONTACT

1-888-454-2383

MORE


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.

MULTIPLAN_FairSquareMedicare_01062022_M