Today’s seniors (65+) are eligible for healthcare coverage under Medicare. Within the “Medicare” bucket, there are several options that individuals must navigate to find the best one for them. Straight Medicare involves Part A (hospital insurance), Part B (medical insurance), and Part D (prescription insurance). Part C is Advantage plans and encompasses all the parts listed above in one package, provided by private insurers. If you select an Advantage plan, you no longer have Medicare; you have private insurance.

Some Advantage plans offer vision and dental as part of their package, but there is no standard offering across insurers, and comparison takes careful consideration. It’s extremely difficult to do side-by-side comparisons in any region because Advantage plans have different networks and coverages based on the area you live in. The complexity of the Advantage plans makes navigating the available plans difficult and confusing, and covering the entire topic here would take pages. With that in mind, we’ll cover one aspect of Advantage plans, HMO and PPO plans.

1.    HMO (Health Maintenance Organization) - The HMO Advantage plans generally require members to receive care from a specific network of doctors, hospitals, and other healthcare providers. If a member seeks care outside of the HMO network, they may have to pay the full cost of the service. This model allows the HMO to control costs but can restrict flexibility in choosing providers. HMO plans also usually require an in-network primary care provider to refer patients to specialists. Beware that this can lead to additional copay costs before seeing a specialist. However, HMO plans often have lower premiums and reduced out-of-pocket costs compared to other plans at the expense of flexibility.

2.    PPO (Preferred Provider Organization) - The PPO plan offers greater flexibility than HMO plans. Enrollees do not need to see their primary care provider for referrals to specialists and can see out-of-network providers, although they may pay higher out-of-pocket costs for doing so. This can be a good option for individuals with more complex medical conditions requiring multiple specialist visits throughout the year. These plans often come with higher premiums and out-of-pocket costs.

Choosing between an HMO and PPO Advantage plan depends on each individual’s healthcare needs and budget. Both types of plans involve a network that individuals will need to research to ensure their providers are in-network. Just remember, signing up for an Advantage plan means you no longer have Medicare but private insurance. As a note of context, straight Medicare does not have a network. Any provider in any part of the country that accepts insurance will accept Medicare. If you ever decide to switch back to straight Medicare from an Advantage plan down the road, you may be restricted or blocked from Medicare Supplement plans due to pre-existing conditions... but that is a topic for next month.