Medicare Expert

Linda Bergthold

Managed care plans have been around for decades. You probably have been part of a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO) at some point in your career. Medicare Advantage plans offer several varieties of managed care. 
You can choose an HMO and most likely have a zero or very affordable premium but be restricted in your choice of providers to their network. 
Or you can pay more for your monthly premium and select a PPO or an HMO-POS (Health Maintenance Organization - Point of Service) plan. PPOs offer you the option to see providers outside of their preferred network, but you will pay more. 
HMO-POS (Point of Service) are hybrid plans, with an HMO-like closed network paired with an out of network option. There are also Private Fee for Service Medicare Advantage plans (PFFS), which offer the flexibility but may be expensive. Most Medicare Advantage plans offer an HMO option, but fewer offer PPOs, POS, or PFFS options.

In a Medicare Advantage HMO plan, you will need to designate a Primary Care Provider (PCP) who can help you coordinate your various medical needs and direct you to a specialist if you need one. The HMO will require you to seek care from their contracted providers; if you want to see a provider who is not on contract with your plan, you will likely pay the entire cost of your treatment. HMOs save money by restricting care to the providers with whom they contract; they return those savings to you in the form of affordable monthly premiums.

PPOs give you more flexibility. You may not need a PCP but may be able to go directly to the doctor or hospital of your choice. If you decide you want to see a doctor who is not in-network, the plan may still pay part of your costs. The flexibility you get from a PPO is usually accompanied by higher monthly premium costs, however.

The HMO-Point of Service plans are hybrids of HMOs and PPOs and require you to select a PCP to coordinate and authorize your care. You may save more in these hybrid plans if you go to the providers in their network, but you may have some flexibility in seeing providers outside their networks.

If you are completely satisfied with the doctors and hospitals in an HMO plan and you don’t travel much outside your area, you may save money. That said, the plans can change their provider network each year, so you need to feel comfortable with any potential changes. If you are uncertain about the providers in a plan, you may be more satisfied with a Medicare Advantage PPO or PFFS plan. It comes down to cost. More freedom may cost more.
A Medicare Supplement Insurance or (Medigap) plan does not have these network configurations. If you choose Original Medicare plus a Medicare Supplemental Insurance plan, you may have the option of seeing any doctor, hospital, or laboratory that accepts Medicare patients in the U.S.

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