Tag: HMO

HMO vs PPO Which is Better?

HMO vs PPO Which is Better?

HMO vs PPO Which is Better?

HMO vs PPO Which is better in regards to health insurance, Medicare Advantage Plans and dental insurance

Insurance has changed a lot over the last 20 years, and there is no better example than the way we define and use provider networks. When you are looking at insurance plans, it’s important to compare HMO vs PPO. Which is better for you?

We are here to clear up the confusion, and quickly answer the most frequently asked questions in regards to what is HMO and PPO insurance, how the plans work, and where you will find HMO and PPO insurance plans.

If you are a Medicare user, you will run into HMO vs PPO in regards to choosing a Medicare Advantage Plan. You can learn more about Medicare Advantage Plans here.

What is an HMO?

To start, what is HMO health insurance? A HMO is a network of health care providers, set-up by a health insurance company, to offer services and benefits to its customers. (More at Healthcare.gov.)

What does HMO stand for? Health Maintenance Organization

How does an HMO work?

  • To start, when you are a beneficiary/member of an HMO, you have access to a specific set of healthcare providers in a specified geographical area. (For example, a city, counties or defined state(s).) These providers include doctors, healthcare professionals, specialists and hospitals.
  • You must use the HMO’s contracted providers to have your care paid for by your insurance plan. Moreover, if you go outside the plan for care, you will often have to pay the full cost of your care.
  • You can only go outside of your plan’s provider list in the case of an emergency.
  • With most HMO’s you need to have a Primary Care Physician (called a PCP). Your PCP takes care of your general health care and then refers you to specialists as needed.
  • So then, as a member of an HMO, if you need to see a specialist, your PCP with often have to refer you, to use one. However, in some states, and with some plans, the insurance companies have take away this requirement. As a result, it is important to check your specific plan’s requirements for seeing a specialist.
  • Finally, HMO’s are often concerned about prevention and keeping their member’s as healthy as possible to keep everyone’s costs down. For this reason, health maintenance organizations will often provide prevention based benefits and services to encourage safe and healthy behaviors among their members.

What is a PPO?

So, in regards to insurance, what is a PPO? A PPO is a type of insurance plan that uses a defined network of medical providers to meet your health care needs.

You pay a contracted rate (less than full price) to see network providers. However, unlike an HMO, with a PPO you can use doctors, clinics and hospitals outside the network at a higher cost. (More at healthcare.gov.)

What does PPO stand for? Preferred Provider Organization.

How Does a PPO Work?

  • First, with a PPO, you still have a network of providers to use that offer contracted prices to members of the PPO.
  • In contrast, you have more flexibility to go outside the network if needed to use uncontracted providers. You will most likely have to pay a higher percentage of the costs to use these providers, but the insurance companies will still pay something.
  • You can use any provider when the circumstance is deemed an emergency.
  • With most PPO’s, you do not have to have a referral to see a specialist.

What is the Difference Between HMO and PPO Insurance Plans

Both HMO’s and PPO’s have contracted networks of healthcare providers, clinics and hospitals where they will pay for some or all of your care. However, there are differences to consider:

  • First, HMO’s and PPO’s treat their out of network costs differently.
    • With an HMO, if you go “out-of-network” to see a provider, they may not cover any of your costs. Unless, it is an emergency situation.
    • With a PPO, the plan will most likely cover “out-of-network” provider/hospital visits, but at a lower percentage rate than their “in-network” providers/hospitals.
  • Second, the networks treat visits to healthcare specialists differently.
    • With an HMO, you will often need a referral to see a specialist.
    • With a PPO, you can most often just choose a specialist from the network provider list and make an appointment to see them without a referral.
  • Third, the PCP is usually the person making referrals in an HMO network. As a result,
    • The HMO’s often require having a primary care physician (PCP) on file for its members.
    • While the PPO’s usually do not have a requirement to name a PCP.

So, HMO vs PPO Which is Better?

After reading about the differences between HMO’s and PPO’s, it may seem like the PPO sounds hands down better than the HMO. Regarding, its freedom to see both in-network and out-of-network providers, and its options to see specialists without a referral, it does seem more flexible.

So then, why do people like HMO’s as well as PPO’s, and which one is right for you?

  • To start, HMO’s have changed a lot over the last years. Their networks have become more robust and their requirements less strict. In certain geographical areas, the HMO might include all the major hospital systems and the majority of providers. As a result, it may not matter to a person if they have a PPO or HMO, in regards to providers available.
  • Second, in some states, it is not necessary to get a provider referral to see a specialist in an HMO’s network. State laws often dictate how HMO’s work in this capacity, so it is important to learn how your area’s plans work.
  • Third, their may be a cost difference paid by members between an insurance company’s HMO and PPO plans. These costs include monthly premiums, max out of pocket costs, deductibles, and co-pays/co-insurances. When picking a plan, it often comes down to what is the more affordable option.
  • Finally, since HMO’s are often more focused on the wellness of their members, they might have other prevention benefits and services available to their members. PPO’s can sometimes have these services too, you will just need to do your homework to see what is included when shopping for a plan.

Going Deeper: HMO vs PPO Which is Better FAQ’s.

For those of you that have further questions, here are the most asked questions in regards to HMO and PPO insurance.

What does HMO POS mean? / What is HMO POS Medicare Advantage?

An HMO POS is a type of HMO network that allows more flexibility in seeing providers outside of the specified HMO provider list. POS stands for Point of Service.

According to Healthcare.gov, with an HMO POS, you will still need to choose a PCP (primary care physician) and they will still make specialist referrals for you. However, with a POS, if they want to refer you to a specialist outside of the HMO network, they can do so with the POS designation. Keep in mind, specialists and providers outside of the HMO network may still have higher out-of-pocket costs than in-network providers.

In a HMO POS Medicare Advantage Plan, you also have this ability to use providers who are “out-of-network,” but they may incur an increased cost.

What is Medicare PPO? / What is Medicare HMO?

PPO’s and HMO’s come into play in Medicare when you are using Medicare Part C – aka Medicare Advantage Plans.

Medicare Advantage (MA & MAPD) Plans are alternative plans offered by private insurance companies to take the place of Original Medicare. They often include drug coverage or Part D coverage (MAPD plans). They are approved by the Federal Government and cover everything that Original Medicare covers. In addition, they often offer benefits and services beyond what Medicare offers such as dental, vision and hearing benefits.

So then, what is a Medicare Advantage PPO plan or HMO plan?

What is Medicare Advantage?

Medicare Advantage plans are often HMO, PPO, or PFFS plans. (Additionally, they have special plans set up for people with special needs.) When you are choosing a Medicare Advantage Plan, you will need to consider everything we discussed about HMO’s and PPO’s as they will apply to these private insurance plans and how they set-up their provider networks.

Ok, then what is a PFFS Plan?

PFFS is a Private Fee-for-Service Plan. These plans also have networks that include a list of providers that have agreed to accept the plan. Moreover, you can see other providers, not on the list, as long as they agree to the plan’s terms and conditions and bill the plan directly. Original Medicare is an example of a PFFS plan.

What is HMO Medicaid?

Medicaid is provided to its recipients at a state level. Each state has to decide how to manage their Medicaid programs. These “managed care” options include choosing an insurance administrator to deliver healthcare services to Medicaid beneficiaries in a way that will “manage cost, utilization, and quality.” Often times the contracted insurance company will use an HMO model to structure their network of providers.

medicare and medicaid difference guide

In addition, if you are a “Dual Eligible” beneficiary – meaning that you qualify for both Medicaid and Medicare – then you have the option of finding a private insurer to manage your health care insurance. Each state has DSNP Medicare Part C (Medicare Advantage) providers that offer plans to dual eligible beneficiaries to help them manage the care between Medicare and Medicaid. These plans can also be HMOs or PPOs.

What is an EPO?

An EPO is an Exclusive Provider Organization. According to Healthcare.gov, “EPOs generally limit coverage to care from providers in
the EPO’s network (except in an emergency).”

What is PPO Dental Insurance? / What is HMO Dental Insurance?

Dental Insurance Carriers (aka Insurance Companies) set-up their provider networks similar to how medical companies set-up their networks. They have both DHMO and DPPO plans.

Just like in medical insurance, both DPPO’s and DHMO’s have provider networks, but HMO’s will typically only pay for services rendered by providers in the network. In addition, PPO’s will pay more of the costs for services provided by network providers, but will pay some percentage of costs out-of-network. For this reason, Dental HMO’s are usually less expensive than PPOs.

What is Better HMO or PPO Dental Insurance?

There are other differences between Dental PPO’s and HMO’s including deductible costs, and co-pays/co-insurances. When you are looking at dental plans in your area, you will need to decide what type of plan most affordably meets your dental care needs.

Sometimes this will be an DHMO and other times, this will be a DPPO, so compare costs, provider networks and types of dental services covered before buying a policy. Here is a good article for more detail on dental insurance network types to help you decide what is best for you.

What is Preferred Provider Organization?

Also known as a PPO, a Preferred Provider Organization is a type of insurance plan that provides a network of healthcare providers, offices and hospitals for its members to use at contracted costs. In addition, it provides the flexibility to use providers outside of its networks if needed, but at a higher cost to the members.

Then, what does preferred provider mean?

Preferred provider means that a particular doctor, specialist, clinic, hospital or other healthcare professional or facility is a part of your insurance provider’s network. They will offer a contracted (most likely discounted) rate for you to use their services while on your PPO insurance plan.

What is the largest PPO network?

The largest PPO Network in the United States is MultiPlan.

What is MultiPlan PPO?

Multiplan is not a “type” of healthcare insurance. They are a third party company that helps insurance companies “manage the cost of care, improve their competitiveness and inspire positive change.” You do not have a Multiplan PPO, you have a PPO that uses Multiplan.

What is a Regional PPO?

We often hear the questions, “what is a Regional PPO?” and “what is a Regional PPO Medicare Advantage Plan?” Regional just refers to the service area for the PPO. Members will have access to providers in the PPO’s specified region.

What is Health Maintenance?

“Health Maintenance” refers to a system of prevention. In insurance terms, it refers to an insurance network plan with a focus on keeping medical costs down by keeping members healthy with lower cost preventative care options.

The thought is “an ounce of prevention” will lead to significant cost savings on unused healthcare dollars down the road.

So then, what are the benefits for providers who use HMO model?

Providers who are a part of the HMO model have benefits of being a part of a network that pays them based on a contracted fee. Each network will arrange the contracts differently. However, the providers will know that they have access to the insurance carrier’s pool of members to service for their healthcare needs.

HMO vs PPO Which is Better Summary

In conclusion, whether a PPO or a HMO is “better” all depends on your needs and the plans available in your area.

If we missed any questions in “HMO vs PPO Which is Better” you may have, please drop us a note in the comments and we will do the best to answer them!

All the best. Carly and the MLH Team

Medicare Advantage vs Medicare Supplement

Medicare Advantage vs Medicare Supplement

Medicare Advantage vs Medicare Supplement (Medigap): What Medicare Plan is Best for Me?

I am a firm believer that there is a good Medicare health plan out there for everyone. Moreover, there might even be more than one good choice out there for your situation. If there is more than one good choice available to you, you might be weighing your options right now – Medicare Advantage vs Medicare Supplement.

First, Let’s review your Medicare options:

Original Medicare (no supplement)

Certainly, stand-alone Medicare coverage is an option. You would still want to get Part D Prescription coverage. (There are penalties down the road if you do not get Part D or have credible coverage already and then want to get it later.) However, you would then be left paying your deductibles and 20% coinsurance out-of-pocket.

For example, with ONLY Original Medicare and NO supplement or MA plan, if you ended up having a major health event like a surgery, the 20% left that medicare doesn’t pay could still be thousands of dollars.

You would also have to go through medical underwriting with a private insurance carrier if you later want a supplement and you have missed your Guaranteed Issue time frame. You can always join a MA plan later, but only during a special enrollment period or during the Annual Enrollment Period (Oct. 15 – Dec. 7).

Original Medicare with a Supplement

With this option, you keep Original Medicare and add on a Supplement (Medigap) Policy with a private insurance company to help you in paying the pieces that Medicare does not. These costs can become large if you have a big medical event or a chronic illness. In this instance, a Supplement would protect you from “losing the shirt off your back”! You would also have a stand-alone Part D Prescription Drug Plan (or a plan that is considered “credible coverage”).

Medicare Advantage (MA/MAPD)

Finally, with a MA/MAPD plan you would replace Original Medicare with a bundled plan offered by a private insurance company. These often include a Prescription Drug Plan. (These are called MAPD plans, which are most the common plans). You still “have Medicare” with these plans. However, they are run by private companies who put together networks of providers and health facilities. (For example, HMO, PPO and PFFS networks.)

One question we hear a lot is, “can I have both Medicare Advantage and a Medicare Supplement?” No, you have one or the other. Not both, they do not work together and it is illegal for anyone to sell you both.

What are the Differences Between having a Supplement (Medigap) and having Medicare Advantage (MA/MAPD)?

Now, let’s do a breakdown of Medicare Advantage vs. Medicare Supplements. First, let’s look at the difference in care and the differences in cost. We are assuming you either have Medicare Advantage or Original Medicare with a Supplement (aka Medigap Plans).

Medicare w/Medigap Medicare Advantage
Care OptionsYou can go to any doctor that accepts Medicare already. Specialist referrals are not needed.You typically must visit doctors that are in the plan’s network if you do not want to pay extra. Specialist visits sometimes need a referral, depending on your plan. Click here to read more about plan structures (HMO, PPO, etc.)
ExtrasNASome plans include extra benefits such as hearing, dental, vision and fitness/wellness programs.
Medicare Part A – usually premium free
Part B – Monthly Premium (based on income level)
Part D – Monthly Prescription Premium
Supplement – Premium dependent on which company & plan letter you choose
MAPD plans with Drug Coverage Included pays a monthly premium to the insurance company for all services. Some plans include the Part B Premium and some plans do not. Some plans have a $0 monthly premium option.
Out of Pocket CostsCosts can be very minimal depending on that Medigap plan you choose. There are high deductible options, and starting in 2020, the Part B deductible will have to be paid by everyone who is just aging into Medicare. Some plans have lower out-of-pocket costs than Original Medicare and all have a yearly limit on out-of-pocket expenses that are covered by Medicare.
Domestic TravelEmergency and urgent care are always covered in the US. You can use any doctor that takes Medicare in the US for routine visits. If you spend long periods of time traveling and need to see a doctor for routine visits whole out of town, this might be your best option. Emergency and urgent care are always covered in the US. You will have to use doctors in network for routine visits for them to be covered. Some insurance companies have large networks that can span several states, so make sure to inquire about how large the network is before you rule out a MA plan if you travel a lot.
Foreign TravelSome supplement plans cover part of the emergency medical fees you may use in other countries. Plans C, D, F, G, M & N have 80% foreign travel exchange limits. Plans do not typically have any over seas coverage.

Making Your Choice between Medicare Advantage vs Medicare Supplement

Now that you understand the basics of Medicare Advantage Plans and Original Medicare plus a Medigap (Supplement) Plan and know the significant differences between the two, it’s decision time.

First, I always recommend speaking with a licensed, independent agent that can help you in assessing all the various plan types available in your area. Every county has different options for MA/MAPD plans, and insurance carriers have different prices on the supplement plans you may be considering.

Second, it’s good to have an idea of what is important to you. You should be thinking specifically in regards to money and lifestyle when choosing a path.

Consider these questions when choosing between Medigap and MA Plans:

Do you plan on living in another place for a significant period of time during the year?

If you are a “snowbird” or are planning a longer vacation where a routine doctor visit may be necessary when away from your primary residence, then a supplement may be your best choice. Remember though, emergency / urgent care visits are covered with both types of plans.

However, if your travel happens to be international, Both Original Medicare and MA plans do not cover foreign travel, but some supplement plans (plans C, D, F, G, M & N) have 80% foreign travel exchange limits that will help off-set some costs.

What is (or will be) your cash flow situation in retirement?

Some retirees have pensions, social security and other payments (like annuities) that come to them automatically each month. Other retirees have less of these automatic infusions or smaller required distributions and prefer to leave as much of their cash in investments as possible. Finally, some retirees are on a smaller, fixed income. This might require them to consider cash flow very carefully.

In each situation, you will need to review how you are paying for your health services, as each plan offers different payment options.

Cash Flow with a Supplement:

With a supplement, you will have a set amount of money (that could be a larger sum than an MA plan) come out of your bank (and/or S.S./R.R. check) each month. This can add up when you consider it includes Part B premiums, Part D Prescription premiums, and your supplement premiums. However, if you chose a plan that covers everything Original Medicare leaves out, then you would not pay any other out-of-pocket fees for Medicare covered services.

Cash Flow with a MA/MAPD Plan:

With a Medicare Advantage plan, you will most likely have a smaller amount of money coming out of your wallet each month. You will most likely have an MAPD plan that includes your drug plan, as stand alone MA plans are becoming much more rare, and some plans even include Part B premiums. So, with a MAPD plan, you would be paying a MA premium and maybe your Part B premium each month. Moreover, there are sometimes zero dollar per month ($0/month) premium MA plans available. The costs then to consider and maybe budget for with MA plans is if there are any co-pays, co-insurances and deductibles with the plans. Each plan will be set-up differently, and each plan will also have a max yearly out-of-pocket limit.

Just like in any kind of insurance, Medicare plans are set-up to allow you to choose how much out-of-pocket expenses you incur versus monthly premiums you pay.

Looking at your budget and then talking through your options with a licensed agent will allow you to make the best choice for your situation.

How interested are you in extra benefits being included?

Finally, one more consideration is the other elements that round out your health insurance plan, such as dental, vision, hearing, etc. If you have a supplement plan, you will need to decide if you need these services, and if you do, are you wanting to take on insurance plans for them. You might decide to add on a stand-alone, or a plan that includes any or all of these common services (dental, vision, hearing).

Often times, Medicare Advantage plans will include these services as a part of their plan as an additional benefit which might save you money if you were planning on getting a stand alone plan or paying cash for these services.

Moreover, many MA plans will offer fitness or wellness services that are included at no additional cost. Sometimes this means you will not have to pay for a separate gym membership. Silver Sneakers is one example of a national program that is used by many MA plans to provide fitness and wellness services.

The Next Steps for Choosing Your Medicare Plan

As you can see, developing your Medicare Health Insurance Plan can be very involved, but I am confident you can do it! Having a professional to help you through the process is important. Please reach out to an independent insurance agent to review what is available in your area. They will be able to explain plans in specifics and answer your questions about Medicare Advantage vs Medicare Supplement.

Finally, Medicare.gov is also a good tool for answering your broader questions, and we also encourage you to comment on this page or contact us directly with any questions. Thanks!

Other Topics Related to Medicare Choices:

medicare advantage vs original medicare with a supplement - Medicare Life Health Pin
What is Medicare Advantage

What is Medicare Advantage

What is Medicare Advantage?

What is Medicare Advantage?

In this article, we look at what is Medicare Advantage (aka Medicare Part C). As we discussed in our Medicare 101 Post, there are two different Medicare paths. You will choose one when you are setting up your health care in retirement.

  • Path One = Original Medicare, Part A and Part B, with a stand alone Prescription Drug Plan (Part D) and an optional Medigap (Medicare Supplement) Plan.
  • Path Two = Medicare Advantage (Part C) that replaces Medicare Part A and Part B and typcially includes a Part D Drug Plan. These plans are offered by private insurance companies that you work with directly.

The Basics of Medicare Advantage

Medicare Advantage “bundled” plans are offered by private insurance companies (carriers). You use them IN PLACE of Original Medicare, but they are still Medicare. Moreover, they must include all the same Medicare services covered by Part A (hospital) and Part B (medical). In addition, almost of them include Part D (prescription drugs).

You will hear/see these plans referred to as MA plans, and MAPD plans when they include prescription drugs.

What is the Advantage to Choosing a MA or MAPD plan?

The first advantage to these plans is that many of them have lower out-of-pocket costs than Original Medicare. Secondly, they often have extra benefits such as dental, vision or hearing that is not included in Medicare.

What are the Costs of a MA / MAPD Plan?

What is medicare advantage with Carly Cummings, creator of Medicare Life Health Co.

First, remember that most people have Medicare Part A “premium free”. (See this page on the medicare.gov website if you are wondering if you are in the “most people” category.) Second, remember that most people also pay a monthly premium for Part B. However, some Medicare Advantage plans will pay all or part of your Part B premium.

There may be many (or just a few) different MA and MAPD plans available in your area. They will all be set up differently and cost different prices from carrier to carrier. We suggest finding an independent insurance agent/broker that can compare different plans, carriers (insurance companies) and prices. They will help you pick a plan that fits your lifestyle and financial needs. Please note, there are often plans out there that have low or even $0 monthly premiums.

In addition to whether or not you pay a monthly premium with a MAPD plan, each plan will have a different set up for out-of-pocket costs:

You will need to decide what plans fit well with your monthly cash flow situation in addition to how often you need medical products and services.

How do MA and MAPD Plans Work?

Insurance companies usually set-up Medicare Advantage programs as a PPO or HMO networks. You might be familiar with this style of network plan insurance if you had (have) one from an employer or even from the open marketplace.

Typically, you will need to use doctors in your MA plans network. (Unless it is an emergency, or unless you are willing to pay extra to go “out-of-network”). If you have providers you want to keep, ask them if they are part of a network you are considering. In some MA/MAPD plans, you may also need referrals to see specialists. These are all plan specific requirements. You will need to look all these requirements prior to making your MA decisions.

HMO and PPO plans have much more robust networks now than plans from the past. Most people can find a plan that is large enough/flexible enough to work with their lifestyle. This is true even if they travel frequently in retirement. I recommend talking to a licensed agent to make sure you understand how the plans work.

When Can You Sign-up for a Medicare Advantage Plan?

If you are a US citizen with both Part A and Part B Medicare coverage, you can join MA plans in your area during these times:

  • During your Initial Enrollment Period (IEP): Just like joining Original Medicare, you can join a MA plan during the 7 month period (3 months before the effective date of Medicare Part A and B, including the month Medicare begins, and then 3 months after) of time that you are turning 65.
  • During the Annual Enrollment Period (AEP): October 15th to December 7th, is when you have the opportunity each year to join an MA/MAPD plan. Your new coverage will begin January 1st.

    *OEP – As of 2019, if you are already in a Medicare Advanage plan, you can also change plans during AEP, or you can switch plans once (or switch back to Original Medicare) during Open Enrollment Period – January 1st to March 31st.

Other things the US Government would like you to know about MA Plans:

  • Emergency and Urgent Care is always covered with MA plans.
  • MA plans cover all Original Medicare Services and carriers must follow all Medicare rules.
  • MA plans may have extra benefits like vision, health, dental and other fitness/wellness programs.
  • You can join a MA plan with pre-existing conditions (except for ESRD, which is a special case and has other options).

Who can Help You with a Medicare Advantage Policy?

Just like a supplement, you can compare these plans online, but I suggest you talk to a professional, independent insurance broker that can help you compare plans. It won’t cost you any more money to use a professional, and Medicare Advantage Plans can be overwhelming when you are trying to pick one, especially if there are many offered in your area.

Remember, independent agents work for you (not the carriers), and having an actual person to help you in communicating to insurance carriers and keeping you updated each year is very valuable. This is something you do not get if you sign-up directly with a company online.

If you are in the state of Nebraska and you are looking for an agent to help you in any area of Medicare, Health or Life Insurance, please get in touch with me here.

Where to go next:

Medicare Advantage Vs Medicare Supplement