What Is the Difference Between an HMO Plan and a PPO Plan?
When comparing plans, it’s important to have all the information you need to choose a plan that’s right for you. When it comes to Medicare Advantage plans, there are similarities and differences between HMO and PPO plans.
First, let’s start with Original Medicare
Medicare is basic health insurance provided by the Federal government for people 65 and older, and people under 65 who meet certain criteria. When you sign up for Medicare, you are signing up for Part A and Part B. This is the first step to completing your Medicare coverage.
Medicare consists of 4 separate parts:
- Part A (Part of Original Medicare offered by the Federal government)
- Part B (Part of Original Medicare offered by the Federal government)
- Part C (Medicare Advantage plans offered by private insurance companies)
- Part D (Drug coverage offered by private insurance companies)
Why do you need additional coverage?
Many people discover that relying on Original Medicare (Part A and Part B) doesn’t provide enough coverage. With Original Medicare, there are gaps in your coverage. For example, Original Medicare only covers 80% of Part B expenses after the annual Part B deductible is met. The remaining 20% is your responsibility and could add up to thousands of dollars each year. Plus, Original Medicare doesn’t include Part D prescription drug coverage, routine vision and hearing exams, and certain other services.
In order to have enough coverage, many people choose to enroll in a Medicare Advantage plan.
How does an HMO plan work?
An HMO plan is a Medicare Advantage plan (Part C) that offers everything Medicare covers plus additional benefits such as prescription drug coverage (Part D), vision and hearing exams, preventive dental coverage, and discounts on fitness programs. In addition, Medicare Advantage HMO plans can help save you money with monthly premiums as low as $0 and an out-of-pocket maximum that limits what you pay for medical services in a year.
With a Medicare Advantage HMO plan, you choose a primary care physician or PCP to be your main doctor. Your PCP keeps track of all the care you receive and refers you to specialists if needed. Your PCP makes sure you get the care that is right for you. Your PCP can also help you avoid unnecessary expenses such as duplicate tests. This is one of the advantages of an HMO plan—having a team behind you to make sure you are getting the right care.
How does a PPO plan work?
A PPO plan is also a Medicare Advantage Plan (Part C), but it works differently than an HMO plan. With a PPO plan, you don’t have a PCP. Instead, you can access any doctor or hospital, but you would be responsible for coordinating your care. Seeing doctors inside the network will generally have lower costs for services than seeing a doctor outside of the network.
A PPO plan provides everything Medicare covers plus additional benefits such as prescription drug coverage (Part D), vision and hearing exams, preventive dental coverage, and more. A PPO plan can have a monthly premium as low as $0 and an out-of-pocket maximum that limits what you pay for medical services in a year.
Which is right for you?
Choosing between an HMO and a PPO plan comes down to how you see your doctor. An HMO plan will provide more of a partnership with your doctor, and a PPO plan will allow you to access any doctor or hospital.
At Tufts Health Plan, we have a team of Medicare Experts available to answer all your Medicare questions and help you find the plan that’s right for you. Tufts Health Plan offers several HMO plans and an Access PPO plan.
Just call 1-800-890-6600 (TTY: 711).
You can also compare plans on our website.