Medicare HMO vs PPO: What's the Difference?

Medicare HMO plans have tighter network restrictions, whereas PPO plans offer broader networks and more flexibility. Let’s explore the pros and cons of each type of plan.

When choosing a Medicare Advantage plan, it’s important to understand the differences between an HMO and a PPO. Both are managed care options offered by private companies that contract with Medicare to provide coverage.

  • HMO stands for Health Maintenance Organization and is designed to keep costs low. You must select a Primary Care Physician (PCP) from within the Medicare Advantage HMO’s network, and they will refer you to specialists as needed.
  • PPO stands for Preferred Provider Organization and is a more flexible option. Unlike an HMO, you can go outside the plan’s network for care; however, your costs will typically be higher.

Understanding HMO Plans

Health Maintenance Organizations (HMOs) require you to select a primary care physician to oversee your medical care. They work with a limited network of healthcare providers and require that all of your care is received within the network, except in case of emergency.

Many HMOs also require referrals from your primary care physician if you need to see a specialist, and the plan may only cover out-of-network specialist care if authorized by the HMO. HMOs typically have lower out-of-pocket costs than PPO plans (such as copayments or coinsurance) but have fewer options for doctors and hospitals.

Understanding PPO Plans

Preferred Provider Organizations (PPO) are plans that offer a broader range of healthcare providers to choose from, including those out of the network. There are no required referrals from your primary care physician to see a specialist, though there may be additional costs for out-of-network care.

PPOs typically have higher premiums but afford more flexibility in choosing healthcare providers. It’s essential to review the provider network to ensure that the doctors and hospitals you prefer are included in that network to avoid higher costs.


To enroll in an HMO or PPO Medicare Advantage plan, you must be eligible for Medicare Part A and Part B and live within the plan’s service area. You can enroll in a plan once yearly during Medicare’s annual enrollment period, which typically runs from October 15th through December 7th.

Which Plan Is Right for You?

Choosing the right plan is a big decision. If you value your right to choose your doctors, a PPO plan may be your best option. However, an HMO plan could be the better choice if you are looking for a lower-cost option and are okay with limited provider options.

It’s also important to consider your health needs and whether you require specialty care. If you have a condition that requires a specific specialist, you’ll want to look over the plan’s network and make sure that your specialist is included.

You’ll want to ensure that your chosen plan covers the care you need for the best possible healthcare outcome.

Bottom Line

Medicare HMO and PPO plans each have their pros and cons. It’s crucial to consider your personal needs and priorities when choosing a plan. While HMO plans offer lower out-of-pocket costs and a standardized approach to care, PPO plans afford more choices for healthcare providers.

Healthcare is an important personal choice, and a plan requires careful consideration. Your decision should be based on your healthcare needs, preferences, and overall budget.

Consult with your Medicare advisor and healthcare provider to make the right choice that will provide you and your family peace of mind regarding your health.

Sources: HumanaMedicare HMOsMedicare PPOsUnited Health Care


  • Why would I switch to a Medicare Advantage plan?

    Switching to a Medicare Advantage plan can offer several benefits. These plans often provide more comprehensive coverage than Original Medicare and can also include extras like dental, hearing, and vision care.

Mark Prip

Since 2003, Mark Prip has been leading  Policy Guide, Inc., providing knowledgeable information about Medicare, life insurance, and dental coverage to clients in over forty states. With his unparalleled hands-on experience aiding countless Medicare beneficiaries in selecting an appropriate health plan, he is a prime example amongst other competitors for expertise and assistance. Mark has held his Florida Health & Life Insurance License (E051889) since 2003. View his license profile on the Florida Department of Insurance website.