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HMO’s and PPOs: Which is best for My Medicare Plan?

Difference between HMO's and PPO's

What’s the deal with all these healthcare acronyms nowadays? HMO? PPO? HSA? PFFS? Why isn’t there just one type of insurance provider? What does all this mean to you? Well, we’re here to tell you what HMO’s and PPO’s are, what the difference is between them, and what you might gain from choosing either as your healthcare plan in your Medicare Advantage plan.

HMO

HMO stands for Health Maintenance Organization. An HMO is the Medicare Advantage Plan that provides you with a care network that you go to for your medical needs, be it emergency or otherwise. HMO’s, predominant in the western part of America, is when an insurance company provides you with the doctors and specialists set within a predetermined network. These networks are known for their inflexibility, meaning that if you see anyone outside of this structure to seek care, it likely won’t be covered by your insurance at all. The biggest upside to signing on to an HMO is that you’re given access to a full range of doctors and specialists that can fill your every medical need, and the prices tend to be cheaper than other plans. The major downside of going with HMO, however, is that the network isn’t flexible at all as to who you can see under coverage. Doesn’t sound like your kind of insurance plan? Ok, well let’s check out PPO’s to see if they’re more your speed.

PPO

PPO stands for Preferred Provider Organization. Much like an HMO, this Medicare Advantage plan provides you with a network of doctors and specialists to help your medical needs. The main difference here is that PPO’s are significantly more flexible in allowing coverage of professionals not within this network. The amount you’d be asked to pay to see these non-covered professionals is inarguably more than if you stay inside the network, which is their incentive for you to stay within their system. However, the premiums are less than with an HMO and many people prefer the flexibility this type of company offers you.

Which benefits are better for you?

Well, that really depends, as that’s a hard question to answer objectively. Everyone’s situation is different and thus calls for different plans and providers to cover things. Let’s go over the specific benefits of HMO’s and PPO’s and see which works best for you.

An HMO can have reduced costs depending on the volume of people within the network. Also, because you’re only getting referrals for medically necessary services, your costs are monitored and maintained. Many HMO’s don’t require a deductible and since the service fees are flat, those in the system can rest assured that the monthly payment rate will not increase. The main issue people have with this type of provider is the lack of flexibility. Take, for example, if you’re someone with a chronic condition like diabetes. If you travel elsewhere in the US and have some complications with your diabetes, you might not be covered by emergency services or a nearby facility to get the care you need because of your HMO.

On the other hand, PPO’s offer reduced plan costs because of negotiated discounts that the insurance providers have agreed to. Their network makes it easier to find affordable care, and even better beneficiaries can seek care from professionals outside of this system at a higher rate. Basically, you sacrifice low prices for flexibility when it comes to a PPO. Take, for instance, that you’re dealing with the same diabetes complications from before and you’re out of state. Local facilities are covered by your PPO thankfully, so you get the care you need. This just comes at the cost of a higher premium each month.

That’s great and all, but which one do you pick?

So basically, the benefits of each type of plan are subjective to your situation and might work better or worse for you depending on your previous conditions and general health. If you like more flexibility with your plan and know that you’re going to have trouble in the future getting care from a specific network, then perhaps HMO isn’t the way for you. However, if you’re wanting to pay less for care each month and find more solace in dealing with a Primary Care Physician, then HMO might be your way to go.

Figuring out the difference between HMO’s and PPO’s and which would be better for you is an important part of you Medicare healthcare decision. For help with this, or help to decide if you’d rather stick with Original Medicare, contact a licensed representative today. Finagling Medicare to meet your needs on an affordable basis can be really complicated, and it’s not something you need to do alone.