HMO vs. PPO
You’ve probably heard the terms “HMO” or “PPO” before, but have you ever wondered what they stand for, what they mean and most importantly how that affects you?
The terms HMO and PPO are relevant when you are considering Medicare Advantage plans because both of these types of plans are structured with a network.
*Remember a Medicare Supplement (Plan F, Plan G, Plan N...) do not have any networks at all.
We are going to explain what an HMO is, what a PPO is, what the difference between the two structures are, and how that impacts you and your healthcare.
HMO stands for “Health Maintenance Organization”. A HMO plan has a set network of providers and facilities and you have to stay within the set network to receive services. These providers have agreed to the contracted pricing and coverage parameters. The ability to see a provider who does not contract with the plan's network (out-of-network) is rare and usually requires special circumstances and authorization.
For some HMO plans the primary care physician has to give you a referral to see a specialist. In these cases they would be considered the "gatekeeper to your care". However, not all HMO plans have this feature so it's important to verify.
Okay, so now we have a basic understanding of what a HMO plan is what's a PPO?
PPO stands for "Preferred Providers Organization". A PPO plan has a network of providers and facilities however, you have the ability to see out-of-network providers and facilities if you choose. When you see an out-of-network provider or visit an out-of-network facility it may cost you more with a larger copay or coinsurance but you have that flexibility. A referral from a primary care physician is not necessary to see a specialist and you are able to self-refer.
How does this difference in plan structure affect you, the plan member and patient?
Networks
HMOs typically work in a regional area, so if you find yourself spending extended periods of time outside that area and want to be able to receive routine care wherever you are an HMO may not be the best fit.
For example, if you are a snowbird and spend 6 months out of the year in Florida you want a plan that goes where you are and where you are able to see providers in the area. You don't necessarily want to have to travel to your permanent address area to receive routine care.
However, if you are someone who spends the majority of your time in a certain region and don't find yourself traveling outside the area for extended periods of time an HMO can be a great fit!
*In an emergency situation you are always covered in the US.
The ability to see out-of-network care is important to some individuals. If they find themselves in a medical situation where they want to go to a certain facility or provider and that facility/provider does not contract with their plan's network it can be frustrating. If having flexibility when it comes to your healthcare is extremely important a PPO could be a good fit since that allows for greater flexibility than an HMO.
Referrals
It's important to verify whether the HMO plan you are interested in or enrolled in requires a referral from your primary care physician to see a specialist. Some individuals find it very important to them to have control and autonomy over the care, so they don't like the characteristic of needing their primary care physician to provide a referral to see a specialist. Other individuals do not mind this characteristic and are comfortable with their primary care physician having that ability.
It all comes down to personal preference and what works best for you! However, if you are considering an HMO plan we recommend verifying that characteristic so you are aware of how exactly your specific plan works. The more informed you are, the less surprises there are which is a good thing when it comes to your health insurance.
Surprise birthday parties = 🎉👍 Surprises about health insurance coverage = 🚫👎
Costs
For Medicare Advantage plans in Pennsylvania currently there is not a substantial difference in monthly premium costs, deductibles or copayments/coinsurances between the two plan types (HMO vs. PPO). The difference comes down to your care and your personal likes/dislikes.
We recommend setting up an appointment with a licensed insurance broker in your area, so they can discuss the differences with you to help determine what type of plan is the best fit for you based upon your health needs, preferences and budget. There is never a fee or increased premium by working with an independent broker.
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Any other Medicare questions? We can be reached at 814.201.9708 or at jocelyn@evolveinsurancegrp.com.