Medicare Advantage HMO vs PPO: Which Plan Type Is Right for You?

When you're shopping for a Medicare Advantage plan, one of the first decisions you'll face is plan type: HMO or PPO. These two structures have very different rules about networks, referrals, and out-of-network care -- and choosing the wrong type can leave you with unexpected bills or limited access to your preferred doctors.

A Health Maintenance Organization (HMO) plan requires you to use a network of doctors, hospitals, and other providers. Going outside the network -- except in a true emergency -- means you pay the full cost yourself.

Key HMO features:

• Must use in-network providers for all non-emergency care
• Usually requires a primary care physician (PCP) who coordinates your care
• Referrals typically required to see specialists
• Lower premiums and out-of-pocket costs than PPOs
• Smaller, more defined network

Best for: People who have established relationships with doctors who are in the plan's network, prefer lower costs, and don't need out-of-network flexibility.

A Preferred Provider Organization (PPO) plan gives you more flexibility. You can see any Medicare-accepting provider -- in-network or out-of-network -- but you pay more for out-of-network care.

Key PPO features:

• Can see any Medicare-accepting provider
• No referral required for specialists
• Higher premiums and out-of-pocket costs than HMOs
• Two-tier cost structure: lower costs in-network, higher costs out-of-network
• Larger, more flexible network

Best for: People who travel frequently, have specialists outside a typical HMO network, or want maximum flexibility in choosing providers.

HMO plans typically have lower premiums (often $0) and lower copays. PPO plans charge more for the flexibility -- premiums may be $30-$100/month higher, and out-of-network cost-sharing can be substantial.

Example comparison (Florida, 2017):

Most HMO plans require a referral from your PCP before you can see a specialist. This adds a step -- and sometimes a delay -- to getting specialist care.

Some HMO plans offer a "HMO-POS" (Point of Service) option that allows some out-of-network care at higher cost-sharing, giving a bit more flexibility than a standard HMO.

PPO plans never require referrals. You can call a specialist directly and make an appointment without going through your PCP.

If you split time between Florida and another state, a PPO is almost always the better choice. HMO networks are geographically limited -- your Florida HMO won't cover routine care when you're in Ohio for the summer.

PPO plans cover out-of-network care (at higher cost-sharing), giving you access to providers wherever you are.

Before choosing any MA plan -- HMO or PPO -- verify that your specific doctors are in the plan's network. Don't rely on the plan's general network size. Look up each of your doctors individually on the plan's provider directory.

Networks change every year. Even if your doctor was in-network last year, verify again during AEP.

We do not offer every plan available in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.