Video: PPO vs HMO: What’s the Difference?
When you’re enrolled in a Medicare Advantage (Part C) plan, you’re more than likely dealing with either a PPO or HMO network of medical providers.
While you can see any doctor who agrees to bill your plan for services, your doctor may or may not be IN-network with the plan you’re enrolled in. If you don’t confirm this ahead of time, you run the risk of paying more for the medical services, or even 100% of the cost!
Let’s briefly compare a PPO to an HMO…
PPO (Preferred Provider Organization)
A PPO is a Preferred Provider Organization. This is where you have access to IN-network providers at a lower cost share, and usually OUT-of-network providers at a higher cost. Not every plan works exactly this way, but in general you should expect to pay more for medical services in a PPO when OUT-of-network.
Review the plan’s Summary of Benefits to see the breakdown of in-network versus out-of-network coverage.
HMO (Health Maintenance Organization)
An HMO is a Health Maintenance Organization. The name is a little strange, but what’s important here is that an HMO is ONLY going to provide benefits when you are IN-network. It will NOT cover anything when the care is received Out-of-network, unless it’s an emergency. Emergency services are deemed in-network, even in HMO plans. However, an emergency doesn’t last forever. Once you’re stabilized, you eventually could be classified as out-of-network and be required to pay 100% of the costs thereafter.
Review the plan’s Summary of Benefits, as well as the Evidence of Coverage, for how they handle out-of-network emergency services.
Should You Choose a PPO or HMO?
If you’ve decided to go with Medicare Advantage, you need to decide if a PPO or HMO is more your style.
If you want more flexibility and want to be prepared for the “what-ifs”, then consider a PPO. Usually a PPO will have some higher copays, a higher max out-of-pocket limit, and potentially less extra benefits…but they are still very worthy of consideration.
If you prefer the benefits of an HMO plan, and you’ll always make sure to be in-network, then you can consider an HMO.
Reference Links
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