Medicare HMO vs. PPO

Reviewed on 5/13/2021
Medicare HMO vs. PPO
Medicare HMO and PPO typically have more similarities than differences

Many times, people don’t realize the importance of health care until they fall ill. But finding the right health care coverage should be a priority for everyone. That’s because it doesn’t just come to your rescue in emergencies—it gives you peace of mind.

Medicare is a type of government health care coverage for people age 65 and older. While there are several Medicare options, the most popular are:

  • Original Medicare 
  • Health Maintenance Organization (HMO)
  • Preferred Provider Organization (PPO)

While both Medicare HMO and PPO typically have more similarities than differences, the main contrast comes down to premiums or higher costs in 

When choosing a Medicare plan that is best for you or your loved ones, you may want to consult a plan representative to better understand the advantages of each plan. 

Comparing Original Medicare, HMO and PPO

Table: Comparison of the Original Medicare, Medicare HMO and Medicare PPO
Original Medicare Medicare HMO Medicare PPO
Gives you the advantage of consulting any health care provider and using any health care facility that accepts Medicare plans*. Allows you to only consult providers in the network**. Allows you to consult any health care provider, but you typically need to pay more when seeing the out-of-network providers.
Allows you to visit doctors anywhere in the U.S. Allows you to only visit doctors in your plan’s service area, except in emergencies or when urgent care is needed. Allows you to visit doctors anywhere in the U.S., but you typically need to pay more when seeing out-of-network providers.
You do not need to have referrals to see specialists. You typically need referrals to see specialists. You do not need to have referrals to see specialists.
Does not cover hearing, dental or vision services. May cover additional services, including hearing, dental and vision. However, additional benefits may increase your premium costs or other out-of-pocket expenses. May cover additional services, including hearing, dental and vision. However, additional benefits may increase your premium costs or other out-of-pocket expenses.
Allows you to sign up for a stand-alone prescription drug plan. Provides prescription drug coverage in most cases. However, you may be needed to pay a higher premium. Provides prescription drug coverage in most cases. However, you may be needed to pay a higher premium.
No out-of-pocket limit. Annual out-of-pocket limit for in-network care (maximum is $7,550 in 2021). Annual out-of-pocket limit for in-network care and combined in-network and out-of-network care (varies by plan).

*Health-care providers are classified as participating and nonparticipating providers. Participating providers accept Medicare’s approved amount for health care services as full payment. Non-participating providers accept Medicare insurance, but they do not accept Medicare’s approved amount for health care services as full payment.

**A network is a group of doctors, hospitals and medical facilities that signs a contract with a plan to provide services.

What is Medigap?

With Original Medicare, you also have the option of purchasing a supplemental insurance policy or Medigap. 

Medigap is a health insurance policy that offers standardized benefits to work with Original Medicare. Medigap plans charge an additional premium to cover Medicare cost-sharing and other benefits.

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References
https://www.medicareinteractive.org/get-answers/medicare-health-coverage-options/medicare-advantage-plan-overview/medicare-advantage-plan-network-comparison-chart

https://www.healthmarkets.com/content/difference-between-hmo-and-ppo

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