What is the difference between HMO, HMO POS, and PPO Medicare Advantage plans?

The flexibility of the Medicare Advantage plan's health provider network.

Medicare Advantage Health Maintenance Organization (HMO), Health Maintenance Organizations with Point of Service (HMO POS), and Preferred Provider Organization (PPO) plans are all "network-based" Medicare Advantage plans, that is, all three of these Medicare plans have a fixed network of hospitals, doctors, specialists, and other health care providers that participate with the plan - and one main difference between these plans is the flexibility with which members are allowed to seek care outside of the plan’s established health network.

For instance, HMOs typically have a more restrictive network of health care providers and generally require plan members to select a primary care physician (PCP) to coordinate all of their care - and plan members may only be permitted to go outside of the provider network with a referral from the PCP. (For example, if you wish to see a specialist, the plan may require a PCP referral). In addition, certain services may require your plan’s prior authorization to ensure that care is appropriate and necessary.

HMO POS Medicare Advantage plans may also require all plan members to have a PCP coordinating the member's health care, but the plan may allow their members more access to “out-of-network” providers. But, once outside the plan's network, the plan member may pay a higher out-of-pocket cost for non-network care and the HMO POS out-of-pocket spending limit (MOOP) may not apply to out-of-network care or the plan may have a higher out-of-network MOOP.

A Medicare Advantage PPO may allow their members to have even more access to “out-of-network” providers without a referral, but the plan members probably will pay a higher out-of-pocket cost when outside of the established provider network.

Bottom Line: You may pay more when you visit a non-network healthcare provider. So, if you have an established set of health care providers (such as your regular doctors and specialists), be sure you review your specific Medicare Advantage plan documentation to see if your doctors are part of the plan’s network or whether there are requirements for a referral and additional costs when you decide to visit a provider outside of your plan’s network.