If you have been exploring your Medicare options you have probably noticed that there are different types of Medicare Advantage plans available.
If having the flexibility to choose your providers is important to you consider a Medicare PPO plan. PPO plans give you the option to use providers within the network or for a higher out-of-pocket cost use providers that are out-of-network.
Other plans available include Medicare HMO plans Private fee-For-Service PFFS plans and HMO-POS plans.
Medicare PPO vs Medicare HMO
When comparing Medicare Advantage plans, you will most likely find that the majority of the plans available are either PPO plans or HMO plans. Both are network-based plans but do have some significant differences.
Medicare HMO – This is a network-based plan where you will choose or be assigned a primary care provider who will generally manage your care. You will be required to obtain a referral from your primary care provider in order to visit a specialist. You will also have to use hospitals and outpatient facilities that are in the HMO network.
In return for having a captive audience health care providers will generally offer attractive terms to insurance companies that result in less out-of-pocket costs for members and often richer benefits. You may find that HMO plans have lower co-pays and may include more extra benefits beyond what original Medicare provides.
With this type of plan you will have to decide if the potential for lower costs and richer benefits can be reconciled with less flexibility to choose your own medical providers. Medicare HMO plans are most popular in areas that have a greater density of population.
Medicare PPO – This is a network-based plan where you will have access to a network of preferred providers who are offering a discounted rate for medical services. Most often you will have to identify a primary care provider when you enroll in a Medicare PPO Advantage plan but will not be required to visit that provider. With a Medicare PPO you will not need a referral from your primary care provider to visit a specialist.
The biggest benefit of a PPO plan compared to a HMO plan is the ability to go out-of-network to receive medical care. Out-of-network care will generally require a higher co-pay or coinsurance amount with the exception being emergency care.
Medicare PPO plans also include additional benefits beyond what is available from original Medicare. If you have both PPO plans and HMO plans available the network restrictions will generally be the factor that may sway you one way or another.
Medicare PFFS and HMO-POS plans
PFFS plans are plans that are designed to allow you access to any provider that accepts Medicare assignment and accepts the plan’s payment terms and conditions. The downside of this type of plan is that providers can accept the plan on a visit-by-visit basis. Often times these plans have higher premiums and offer less of the extra benefits that you will find in a PPO Medicare plan. Many Medicare Advantage plans that have not renewed are PFFS plans.
HMO-POS Medicare plans are almost a hybrid of a HMO plan and a PPO plan. Though not as common as a Medicare PPO plan they do afford some flexibility not found with a Medicare HMO plan. If you have a HMO-POS plan available it is worth considering.
There are many good HMO plans available if you can live with the network restrictions but if you want more flexibility choose a Medicare PPO. It’s difficult to put a dollar figure on the the freedom to go out-of-network if the need arises.