Medicare Advantage HMOs, PPOs, and PFFS

Medicare Advantage programs are usually grouped into a few different categories. The three most common types of Medicare Advantage Plans are the HMO, the PPO, and the PFFS. You’re probably familiar with the HMO and PPO types of coverage. Please note, these three plans are not Original Medicare and they are not Medigap plans.

Medicare Advantage HMO

An HMO (Health Maintenance Organization) is a popular choice for medical care. Medicare HMO plans usually have the lowest premium of the three types of plans, but they are also the most restrictive. The HMO plan does not replace Part B coverage. Remember to enroll in any Medicare Advantage plan, you must have Medicare Parts A and B.

Under the HMO option, you select a primary care physician (PCP) from a specific provider network. When you need to see a specialist, you get a referral from your PCP, then select the doctor, hospital, and other provider from the service provider list. In most cases, it costs less to use providers in the HMO network. There are times when you don’t need a referral from your PCP, such as seeking preventative care or emergency room visits.

Some HMO plans have an HMO-POS (Point-of-Service) feature. This is a combination of an HMO and a PPO plan. Under the HMO-POS plan, you can use some providers outside the network, but only in certain situations. Always check with your plan for details.

Many HMO plans include Part D prescription drug plans. You should always check the plan’s formulary list for your specific medication.

Medicare Advantage PPO

Medicare Advantage PPO
A Medicare Advantage PPO (Preferred Provider Organization) plan is similar to an HMO plan, but it’s more flexible. You choose your doctors, hospitals, and other providers from a network list, but you don’t have to select a primary care physician. With a Medicare PPO plan you can see out-of-network doctors, but you will pay a higher cost.

Medicare contracts with providers who are willing to accept their payment amounts for services. You usually save the most money if you select providers from the network list.

There are a few things a Medicare Advantage PPO must provide:

  • Your Parts A and B benefits
  • The plan must include an out-of-pocket maximum spending cap, which protects you against catastrophic spending
  • The maximum any Medicare Advantage plan can set as out of pocket maximum is $6,700 per calendar year.

A Medicare Advantage PPO plan often has a Part D drug plan included, so you don’t pay for additional drug coverage.

When you choose a Medicare PPO plan, you may have additional expenses such as those listed below.

  • You will still pay for Medicare Part B, $144.60 per month in 2020. People with higher incomes pay more
  • You will pay a monthly PPO premium. You may find a plan with a $0 premium, but that could change
  • You will have copays for services
  • Out-of-network costs may be higher and require an up-front deductible

Medicare Advantage PFFS

PFFS (Private Fee-For-Service) plans are a type of Medicare Advantage plan. It is not a Medicare supplement. When you enroll in a PFFS plan, you agree to pay the premium, copays, and coinsurance rates under the plan.

Two of the most attractive features of the plan are the ability to see any doctor in the US. This makes a PFFS a popular choice among people who are frequent travelers. The other feature of this plan is you can have a separate Part D drug plan. You have the choice of selecting a PFFS with a drug plan, or enrolling in a separate drug plan.

There are a few things which are different from the HMO and PPO plans you should be aware of before you enroll in a PFFS plan.

  • Providers who are not contracted with the plan are NOT required to treat you, except in an emergency. You have to find out if they are willing to accept the rate the PFFS will pay for the service you need
  • You will receive a Medicare PFFS plan ID card that is separate from you Original Medicare card, which you must present at the time of service
  • In addition to agreeing to accept your plan’s service rate, the doctor, or other provider, has to bill the plan

The PFFS plan is not as well-known as the HMO and PPO plans so work with a knowledgeable insurance agent who can help you assess your needs and make the right choice.

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