The first thing I would like to point out is that most of the Medicare recipients I speak with daily
do not even know the difference. For that matter, most do not know the difference between
Medicare Advantage, Medicare Supplements and Prescription Drug Plans, but this would be an
article in itself.
A HMO or Health Maintenance Organization is a plan that absolutely requires the insured to
pick a Primary Care Doctor. In addition, that doctor is responsible for managing the healthcare
of the patient. He or she will refer to in-network physicians, clinics and hospitals. The key word
here is in-network. In order for coverage to be in place, everything must be in-network.
Most often, HMO plans only contract with a limited number of providers in a particular area.
Some national carriers have a pretty broad scope as far as what is considered in-network, but
this is the exception, rather than the rule.
The premise of HMO’s is to be focused on keeping patients healthy, without waste. They try to
avoid unnecessary tests and treatment plans.
The PPO, Preferred Provider Organization, also has the insured have a Primary Care Physician
(PCP), but the person retains the right to go out-of-network if they so choose. It allows the
person to have control or input into their healthcare.
It is true that you will pay higher costs or co-pays if you go out-of-network but you do, in fact,
have that as an option which you do not have with HMO’s.
Generally, PPO’s come with a higher cost or premium but this is not always the case. In fact
some carriers have PPO’s which are less costly than the HMO’s of other carriers.
I am always asked, Sean, which plan is the best? My opinion is that it it varies from person to
person. What type of person am I dealing with? In my practice, I ask several questions to try
and determine the best type of plan is best for each particular person.
If you live in the WNY area, I will be happy to sit down to help you sort out your personal
situation. In you are not local, or if you prefer to call, you can call me with questions. I will
always try and take the time to answer your questions.