Health Insurance

HMO Vs PPO What’s Different?

Medicare Advantage Plans, sometimes called Medicare Part C, allow you to combine Medicare Part A and Part B coverage in one policy.
During open Medicare enrollment, you have the option to switch to a Medicare Advantage plan or change your existing plan.  For example, you may wish to switch from a Health Maintenance Organization (HMO) plan to a Preferred Provider Organization (PPO) . . plan or vice versa. Knowing the difference between Medicare HMO and PPO coverage can help you decide which plan is best for your needs.

Medicare Advantage Basics

Medicare Advantage Plans provide another way to cover Medicare Part A (hospitalization and hospital care) and Part B (medically necessary and preventive services). These plans are offered by private insurance companies that have committed to following Medicare rules and regulations.

Most, if not all, Medicare Advantage plans also include Part D coverage, which extends to prescription drugs.
If you choose Medicare Advantage instead of Original Medicare (Parts A and B), you can choose from several different types of plans, including:

  • Health Maintenance Organization (HMO) plans.
  • Preferred Provider Organization (PPO) Program
  • Private Fee-for-Service (PFFS) Scheme
  • Special Needs Program (SNP)

For Medicare Advantage recipients, each plan option has different coverage and different costs

Medicare HMO plans

Medicare HMO plans are similar to other types of HMO plans. Generally speaking, if you are covered by such a plan, you must use an in-network provider. If you need this, there are some exceptions:

  • Urgent Care
  • First aid outside the area
  • Temporary off-site dialysis

Generally, you must choose a PCP when you enroll in a Medicare HMO plan. In most cases, a referral to a specialist may be required, with exceptions for certain annual exams, such as B. Mammograms.3
Remember, with Medicare HMOs, you may be responsible for the entire cost if you are being cared for by an outside provider without exceptions

What’s the difference between an HMO and a PPO plan?

Here are some key differences between HMO and PPO plans.


Cost: Lower monthly premiums, lower out-of-pocket costs, which may or may not include deductibles.
Network coverage: In-network only (except for medical emergencies or when network coverage is unavailable).
Referral: Seeing a specialist may require a referral from a GP.


Costs: Higher monthly premiums, higher fees, including deductibles.
Network Coverage: Flexibly view providers in and out of your network.
Referrals: None – specialist referrals are not required and you do not need a GP.

Is an HMO or PPO plan better?

The decision between an HMO and a PPO should be based on what is most important to you: cost or flexibility. If cost reduction is important and you don’t mind choosing your doctor from within an HMO network, an HMO plan may be right for you. Consider lower costs with less flexibility when choosing a healthcare provider. If you already have a team of doctors or specialists and want to continue seeing them, but they may not be part of your employer’s HMO plan network, then a PPO plan may be right for you. PPO plans are also generally more expensive than HMO plans. Consider higher costs with greater flexibility.

Other Types of Health Plans

While HMO and PPO plans are two of the most common plans, especially when it comes to employer-provided health insurance, there are other plan types you should know about, including EPO and POS plans.
Exclusive Provider Organization (EPO) plans fall between HMOs and PPOs in terms of flexibility and cost. With an EPA, you often don’t need a referral to see a specialist, which makes it more flexible than an HMO. However, like an HMO, there are no out-of-network benefits.
Point-of-service (POS) plans also mix elements of HMO and PPO plans. Under a POS plan, such as an HMO plan, you will usually need a GP referral to see a specialist. However, like a PPO plan, you can see healthcare providers out-of-network, but at a higher cost.

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