Medicare Advantage is an alternative way to get your Original Medicare, Part A and Part B, benefits — you get them through a private company, not directly through the government. Two of the most popular types of Medicare Advantage plans are Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) plans. All Medicare Advantage plans cover the same Medicare Part A and Part B benefits as Original Medicare, excluding hospice care. Depending on the plan, Medicare Advantage may also cover additional benefits, such as prescription drugs, or routine vision and dental services.
The type of plan that works for you will depend on your specific needs and preferences. For some people, cost may be their biggest concern. Others want a plan that accepts all of their current doctors.
Whether you’re new to Medicare Advantage (Medicare Part C) or thinking of switching to a different type of plan, here’s an overview of things to consider before joining a Health Maintenance Organization or Preferred Provider Organization plan.
Health Maintenance Organization plans
A Health Maintenance Organization typically requires members to use in-network doctors, hospitals, and providers to be covered by the plan. If you see an out-of-network provider, you may have to pay the full cost for the service, although there may be exceptions such as medical emergencies or certain types of urgent care, like kidney dialysis.
In this type of plan, you’ll have a primary care physician, and you’ll need referrals from your primary care doctor to get specialist care.
While provider choice is more limited with this type of plan, your health-care costs will generally be lower. By restricting members to a specific provider network, these types of plans are able to reduce overall costs.
Preferred Provider Organization plans
A Preferred Provider Organization is another type of managed care plan. These plans also have provider networks, and your cost-sharing will typically be lower if you use doctors and hospitals from the plan’s preferred list, or network, of providers. However, Preferred Provider Organizations do let members use out-of-network doctors and providers.
Preferred Provider Organizations don’t require referrals to see specialists. If you have health conditions that require urgent or specialized care, you may prefer this type of plan because you won’t have to get approval from a primary care doctor before seeing a specialist. For example, a recently diagnosed cancer patient could see an oncologist directly and get treated sooner, instead of going through the more time-consuming process of getting a referral from a primary care doctor first.
On the down side, this type of plan can have higher costs for premiums, copayments, and coinsurances.
Health Maintenance Organization Point-of-Service plans
If you like the cost benefits of an HMO, but want to have more flexibility in the providers you can use, you might consider joining a Health Maintenance Organization Point-of-Service plan. These Medicare Advantage plans are a hybrid between traditional Health Maintenance Organizations and Preferred Provider Organizations. You’ll usually have a primary care doctor and need referrals to see specialists. However, you’ll also have the flexibility to see out-of-network providers for certain services (usually with higher copayment or coinsurance costs).
Which plan is best for me?
Every person’s situation is different, and the Medicare Advantage plan that works for you will depend on your health needs, budget, and preferences. Although specific benefits will vary by plan, keep in mind that both HMOs and PPOs work the same when it comes to:
- Original Medicare, Part A and Part B, benefits (except hospice)
- Medicare Part D benefits (prescription drug coverage), if included in the plan
- Additional benefits, such as routine vision and dental, if included in the plan
The main differences between these Medicare Part C plan types may come down to cost and provider choice. Also, not every type of Medicare Advantage plan may be available in your area. Some things to consider include:
- Current doctors and providers: If it’s important for you to continue seeing your current doctors, make sure any plan you’re considering includes your doctors in its network, or your costs may be higher.
- Specialized services: Are there specific health-care services that you use more often? Costs for services can vary by plan, so if there are certain health services you use frequently, check how the plan’s cost-sharing works for that benefit.
- Transportation: If transportation is an issue for you, make sure that the plan’s doctors, hospitals, and pharmacies are at a convenient distance from your home or work.
It’s also important to note that if you’re currently enrolled in Original Medicare or a Medicare Advantage plan, you’ll have limited times of the year that you can join and change plans. Assuming you’re not new to Medicare, you’ll have the most flexibility to enroll and make coverage changes during the Annual Election Period, which runs from October 15 to December 7 every year. If you are new to Medicare, you can sign up for Medicare Part C during your Initial Coverage Election Period (usually the same as your Initial Election Period). Outside of this, you generally can’t change plans unless you’re eligible for a Special Enrollment Period.
The specific plans available to you will depend on your location and zip code. If you’d like help finding Medicare Advantage plans in your area, you can contact the Medicare plan directly.