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

Close up top view of a woman showing a round-shaped Lipoma fatty tumor on an open palm stock photo
Does Medicare Cover Lipoma Removal?
Dec 8, 2022
Sinusitis. stock illustration
Is Balloon Sinuplasty Covered by Medicare?
Dec 1, 2022
Gastroenterologist doctor, stomach specialist. Aesthetic handdrawn highlighted illustration of human stomach. Neutral grey background, studio photo and collage. stock photo
Does Medicare Cover Bariatric Surgery?
Dec 27, 2022
bearded man holding his head in confusion looking at his laptop stock image
Why Is Medicare So Confusing?
Apr 19, 2023
Man with disability and service dog stock photo
Does Medicare Cover Service Animals?
Nov 29, 2022
Cover image
Medicare & Ozempic
Jul 20, 2023
senior man holding up his medicare card stock photo
Everything About Your Medicare Card + Medicare Number
May 12, 2022
Cover image
Seeing the Value in Fair Square
May 15, 2023
Vitamin in a syringe stock photo
Does Your Medicare Plan Cover B12 Shots?
Aug 15, 2022
Model of the lungs with the diseased part. Cancer or Ground glass opacity GGO. stock photo
Does Medicare pay for Opdivo?
Nov 23, 2022
Pile of junk in a house, hoarder room pile of household equipment needs clearing out stock photo
Does Medicare Cover Hoarding Cleanup?
Jan 10, 2023
Union Station in Denver stock image
15 Best Ways for Seniors to Stay Active in Denver
Mar 9, 2023
The feet of a man suffering from foot pain stock photo
Does Medicare Cover Krystexxa?
Nov 18, 2022
Cover image
Why You Should Keep Your Medigap Plan
Sep 21, 2023
Saving money against a stopwatch stock image
What is the 8-Minute Rule on Medicare?
Dec 21, 2022
Washington DC stock image
14 Best Ways for Seniors to Stay Active in Washington, D.C.
Mar 11, 2023
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
Illustrated representation of medical marijuana, using a prescription bottle with a marijuana leaf on the front.
Does Medicare Cover Medical Marijuana?
Jan 6, 2023

More of our articles

13 Best Ways for Seniors to Stay Active in Indianapolis

14 Best Ways for Seniors to Stay Active in Nashville

14 Best Ways for Seniors to Stay Active in Seattle

14 Best Ways to Stay Active in Charlotte

2023 Medicare Annual Election Period (AEP)

Building the Future of Senior Healthcare

Can I Change Medicare Advantage Plans Any Time? | Medicare Plans

Can I Have Two Primary Care Physicians?

Can I Laminate My Medicare Card?

Can I Use Medicare Part D at Any Pharmacy?

Can Medicare Help with the Cost of Tyrvaya?

Do I Need Medicare If My Spouse Has Insurance?

Does Medicare Cover Air Purifiers?

Does Medicare Cover an FMT?

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 Cosmetic Surgery?

Does Medicare Cover Diabetic Eye Exams?

Does Medicare Cover Disposable Underwear?

Does Medicare Cover Driving Evaluations?

Does Medicare Cover Flu Shots?

Does Medicare Cover Hypnotherapy?

Does Medicare Cover Ilumya?

Does Medicare Cover Inqovi?

Does Medicare Cover Kyphoplasty?

Does Medicare Cover Light Therapy for Psoriasis?

Does Medicare Cover Linx Surgery?

Does Medicare Cover Nexavar?

Does Medicare Cover Nuedexta?

Does Medicare Cover Ozempic?

Does Medicare Cover PTNS?

Does Medicare Cover Qutenza?

Does Medicare Cover Robotic Surgery?

Does Medicare Cover Scleral Lenses?

Does Medicare Cover Stair Lifts?

Does Medicare Cover the WATCHMAN Procedure?

Does Medicare Cover Vitamins?

Does Medicare Have Limitations on Hospital Stays?

Does Medicare Pay for Antivenom?

Does Medicare Require a Referral for Audiology Exams?

Does Your Plan Include A Free Gym Membership?

Explaining the Different Enrollment Periods for Medicare

Finding the Best Dental Plans for Seniors

Finding the Best Vision Plans for Seniors

Health Savings Accounts (HSAs) and Medicare

How Are Medicare Star Ratings Determined?

How Does Medicare Cover Colonoscopies?

How Does the End of the COVID-19 Public Health Emergency Affect Your Medicare?

How Much Does a Medicare Coach Cost?

How Much Does Medicare Part B Cost in 2023?

How Much Does Rexulti Cost with Medicare?

How to Deduct Medicare Expenses from Your Taxes

Is Botox Covered by Medicare?

Is Displacement Affecting Your Medicare Coverage?

Is Emsella Covered by Medicare?

Is Vitrectomy Surgery Covered by Medicare?

Medicare Advantage Plans for Disabled People Under 65

Medicare Consulting Services

Medicare Explained

Medicare Savings Programs in Kansas

Medigap vs. Medicare Advantage

The Easiest Call You'll Ever Make

The Fair Square Bulletin: February 2024

The Fair Square Bulletin: July 2023

The Fair Square Bulletin: October 2023

What Are Medicare Part B Excess Charges?

What is the Medicare ICEP?

What To Do If Your Medicare Advantage Plan Is Discontinued

What to Do When Your Doctor Doesn't Take Medicare

When to Choose Medicare Advantage over Medicare Supplement

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 2024

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. © 2024 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.