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Published on: 19 Feb 2017 by saimi
HMO VS PPOHow can i choose THE best OPTION FOR ME!
Choosing a Medicare Advantage plan can seem like a very daunting process when you’re unfamiliar with the various types of plans available. When it comes to choosing the best plan for yourself, you want to ensure that you will be receiving the coverage that you require based on your current, and future, needs. In the United States, Medicare Advantage plans are provided through the use of private insurance companies, while still adhering to the underlying requirements set forth by the government. Because these plans are sold through many different private insurance companies, it can be very difficult to decipher all of the information available.
Similar to traditional health insurance plans, Medicare Advantage plans are available in different types of plans. HMO, PPO, or PFFS are the most commonly available types of Advantage plans, but what exactly do those letters mean?
Medicare Advantage Types: HMO, PPO, PFFS
If you’re familiar with the traditional types of health insurance plans, and how their coverage works, then these letters may not seem so scary to you, but for many people, these terms can be quite confusing.
When it comes to the differences between HMO, PPO, and PFFS plans, you first must know what the benefits and downsides are to each of the different types. These different plan types outline the rules for getting coverage for various medical services. They also determine how much you the insurance company will cover in terms of doctors, hospital visits, and specialists’ visits, versus how much you will owe out of pocket.
So while these plan types may seem confusing right now, let’s take a look and see what each different type means.
A: HMO (Health Maintenance Organization)
When it comes to Medicare Advantage plans, the largest benefit of going with an HMO plan is the fact that they are generally less expensive than the other plan types. Paying less doesn’t come without its disadvantages though. In order to see a specialist, you must first visit your primary care physician and receive a referral. This is different from a PPO, since a PPO allows you to visit a specialist directly without the need for a referral.
Along with needing a referral to see specialists, HMO plans generally do not cover your medical expenses if a doctor that isn’t within the policy’s network, unless it is an emergency situation, performed them. Because of this, you should verify that your doctors are within the network before deciding to switch to an HMO plan.
While it seems like there are a lot of rules and regulations when it comes to ensuring you are covered within your HMO policy, it’s these rules and regulations that allow these plans to be less expensive than the others.
B: PPO (PREFERRED PROVIDER ORGANIZATION)
If you’re looking for something with a little more flexibility compared to an HMO plan, then a PPO might be a better option. Unlike an HMO, the PPO allows you to visit a specialist without the need to first visit your primary care physician and receive a referral. In fact, you do not even need to choose a primary care physician at all, you can visit any doctors you choose. You will still be covered even if you visit a doctor outside of the network, but your coverage may be less than if you saw one that was in-network.
There is definitely more flexibility when it comes to choosing a PPO plan as opposed to an HMO, but with the added flexibility comes added costs. PPO plans generally tend to have a higher premium and higher out-of-pocket costs than HMO plans, so it’s always important to be sure you know what sort of coverage you are looking for.
C: PFFS (Private Fee-For-Service)
Private Fee-For-Service plans, PFFS, offer even more freedom and flexibility than both HMO and PPO plans, but unlike the other plans, the insurance company, not Medicare, determines how much it will pay the provider and how much the beneficiary will pay. Another added benefit of the PFFS plan is that you have the ability to add a Medicare Part D plan if you so choose.
Similarly to PPO plans, you do not need to choose a primary care physician, nor do you have to obtain a referral in order to see a specialist. You can visit any hospital, doctor, or medical provider that is within the network and has agreed to the terms of your PFFS plan. Out-of-network doctors can also be seen, but it may be more expensive. It is important, if you see an out-of-network doctor, to always verify before your visit that they will accept the terms of your plan. Out-of-network doctors are not required to accept a plan in the future just because they have accepted it previously.
This should help clear up some of the confusion surrounding the various types of Medicare Advantage plans available to the public today.