ANNOUNCEMENT: Take action today to keep your Medicaid coverage. Learn more.

Medicare HMO vs PPO: What's the Difference?

Finding the right Medicare plan that works for you can be confusing, but we are here to help find the plan that best fits your needs.

When looking for a Medicare Advantage plan that works for you, there are two main plan types to consider: HMO and PPO. Medicare Advantage plans, also known as Medicare Part C, aren't like Medicare supplement insurance plans (Medigap) in that they offer comprehensive coverage under one umbrella plan provided by private insurance companies. 

Both HMOs and PPOs offer similar coverage, but there are some significant differences between coverage and costs. Don’t worry – we explain the major differences between HMO and PPO to help you decide which plan is best for your current health care needs. 


What is a Medicare PPO? 

The acronym PPO stands for Preferred Provider Organization. This plan offers greater flexibility for plan members than a Health Maintenance Organization (HMO). 


PPO Coverage 

Medicare Advantage PPO plans from Alignment Health Plan offer convenience and flexibility. 

You don't need a primary care provider on a PPO plan; you have the freedom to choose any doctors or health care facilities you like, even those outside of the PPO care network. But keep in mind that you'll pay a bit more than you will if you choose in-network providers, even though Medicare will still cover most of your costs.

An Alignment Health Plan PPO plan also includes hospital insurance, medical insurance, and prescription drug coverage. However, your monthly premium may increase depending on which benefits you choose.PPO plans offer out-of-network care coverage but usually cost more than HMO plans. 


PPO Costs

Cost sharing on a PPO plan varies with the providers you choose. This plan also has an out-of-pocket maximum, which is the amount you have to pay after Medicare pays its half. 

If your plan only requires copays, it works similarly to how an HMO works. But if you have coinsurance and deductibles, you'll have to pay a certain amount out of pocket at the time of service, at least until you meet your deductible.

When you choose providers outside your plan's network, you may have to pay them for your health care upfront and file a claim for reimbursement afterward. Some typical costs may include:

  • An in-network deductible
  • A Part B premium
  • A drug deductible
  • Monthly premiums
  • Copayments
  • Coinsurance

Remember, choosing doctors and providers inside your PPO plan network means you'll pay much less than when you use out-of-network providers.


What is a Medicare HMO? 

A Medicare Advantage Health Maintenance Organization (HMO) plan is slightly different in that it emphasizes managed care. All your health care must come from inside the provider network. 

Out-of-network services may still be available, but you'll pay out of pocket with no reimbursement. For these reasons, HMOs don't have the same flexibility as PPOs. 


HMO Coverage 

Alignment Health Plan HMO plans have slightly different covered services than our PPO plans. The major difference is that you must choose a primary care physician who will coordinate all of your care. In addition, if you need to see a specialist (even inside the network), your doctor must approve it and make a referral.

If you use out-of-network providers, you'll most likely have to pay the entire cost yourself, except in true emergency situations, like urgent care or dialysis. 

Prescription drugs are also part of your coverage with Alignment Health Plan’s HMO plans, but be sure to check your specific plan to determine what kind of prescription drug coverage it has.

The key takeaway for HMO plans is that you get lower out-of-pocket costs, but you can't use health care providers outside your plan, except for medical emergencies.


HMO Costs 

Essentially, Medicare Advantage HMO and PPO plans have around the same costs covered for essential medical services. This includes copayments, coinsurance, deductibles, and your monthly premium and Part B premium. However, HMO plans usually have lower monthly premiums than PPO plans. 


PPO and HMO Comparison Chart

Features and Benefits



Will you need to choose a primary care doctor?



Do you get vision, hearing, and dental?

Yes, but this coverage may increase monthly premiums.

Yes, but this coverage may increase monthly premiums.

Do you need referrals to see another doctor or specialist?



Do you get prescription drug coverage?

Yes, for most plans.

Yes, for most plans.

Can you see out-of-network providers and still have Medicare cover costs?


No, except for medical emergencies.


How to Decide Which Is Better for You

When considering HMO vs. PPO, there's no clear choice that will fit everyone. What works for one person may not work for you. Each Medicare Advantage plan varies, which is why it's essential to consider every aspect of care when signing up for coverage. 

The health plan you choose will determine how much you pay out of pocket and which doctors you can see, so it's important to consider your plan's network before your plan renews in the new year. You can also choose Medicare supplement insurance plans (Medigap), but that usually only covers a fraction of what most people need out of a health insurance plan.

That's why enrolling in Medicare Advantage plans like Alignment Health Plan is a financially smart choice. It allows for all the Medicare coverage you need under one convenient plan that private insurance companies offer.

Original Medicare doesn't have the same coverage or health plan benefits that Medicare Advantage Plans offer. To make an informed decision, you need to consider all relevant factors, including the following:


Provider Networks

Consider which provider network is going to work best for you. For example, if you need greater flexibility, a PPO plan might be a better option for you. If you usually stay in network for your medical care, then an HMO might be the better choice. Alignment Health Plan can review your plan options and help you decide which is best for your needs.



Different Medicare plans all have unique coverage and benefits. Look closely at the benefits and decide which fits best with your lifestyle. Remember that each plan may have extra fees based on which network providers you use for your care. 



It's important to consider costs when looking at different Medicare plans. They may vary depending on where you live and the type of health care coverage you need. You're usually going to pay more for health care providers that are outside of your plan's network. If you like the freedom to choose your own doctors, then a PPO will probably work best for you.



Medicare plans also vary by region. Generally, you have to enroll in the program for your state and county then search through the eligible medical professionals inside that region’s network of care. 


Final Thoughts on HMO vs. PPO Advantage Plans

When you need Medicare help, we're here to assist you in deciding which HMO and PPO plan best suits your needs. Contact Alignment Health Plan and talk to a licensed insurance agent to learn more about our available plans and how you can get the health care coverage you need.