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What’s the difference between a PPO plan and a high deductible health plan?

Selecting the right healthcare plan can be stressful. Here are two common options that your employer may provide you.

When you join a Medicare Advantage plan (Part C), you can choose from different types of plans: Medicare HMO or Medicare PPO. Both types of plans offer network and cost options. Learn more about the difference so you can choose the one that best suits your budget and medical needs.

What is a Medicare Preferred Provider Organization (PPO) plan?

By choosing a Medicare PPO plan, you may pay less if you use doctors and hospitals in the plan’s network. PPO plans have large networks, but you can also see doctors who are out of network. Plus, you don’t need a referral to see a specialist. Anthem MediBlue PPO is a Part C plan that gives you the flexibility to see any doctor or specialist, in or out of network, without a referral.

What is a Medicare HMO (Health Maintenance Organization) plan?

When you choose a Medicare HMO plan, you get the most out of your care from a network of doctors and hospitals, barring an emergency. You may also need a referral from a GP to see a specialist. The Anthem MediBlue HMO plan has all the benefits of a Medicare Advantage plan with access to our leading network of quality doctors 

Are PPO and HMO plans offered with Original Medicare?

PPO and HMO plans are only available through private insurance companies like Anthem, like Medicare Advantage plans. If you’re signing up for Medicare for the first time, you’ll need to sign up for Original Medicare first . Then you can choose a Medicare Advantage HMO or PPO plan that works for you.

Medicare PPO plan costs

PPO plans tend to have higher costs than HMO plans, and it’s more expensive to see an out-of-network doctor. You can choose a PPO plan for its flexibility.

Medicare HMO plan costs

The costs of an HMO plan are usually lower than PPO plans, as long as you receive care within the network. Choosing doctors outside the network or seeing a medical specialist without a referral from your primary care doctor will also be more expensive.

Prescription Drug Coverage by Plan Type

Depending on the plan, both types of PPO and HMO plans can offer medical and prescription drug coverage for an all-in-one plan. If you take medications regularly, be sure to find a plan that offers that coverage.

Which is better? The PPO or HMO plan?

The two types of plans offer different types of coverage based on their costs and networks, so the best plan for you depends on your budget and medical preferences.

Medicare PPO is a better choice if:

  • You’re looking for more flexibility in the doctors you see.
  • You don’t mind paying a little more for a plan with a larger network.
  • You prefer to see a specialist or undergo medical tests without a referral.

Medicare HMO is a better choice if:

  • You prefer the lowest costs and don’t mind receiving medical care from a network of doctors.
  • The doctors you want to see are part of the network.
  • You prefer to have a primary care physician coordinate all of your care and provide referrals for other specialists and tests.

Can I change from a Medicare HMO plan to a Medicare PPO plan?

Yes, you can change your plan type during Medicare’s annual enrollment period , from October 15 to December 7. You can also change your Medicare Advantage plan type during the Medicare open enrollment period, from January 1 to March 31. In addition, you may have a special enrollment period that is based on certain life events that affect your coverage. This special enrollment period allows you to switch to another Medicare Advantage plan if you qualify.

Choosing the best employer-provided healthcare plan can be tricky. After sitting through a benefits overview meeting at your company, you may leave with more questions than answers. 

Two common health insurance options employers provide are the high deductible health plan (HDHP) and the preferred provider organization (PPO) plan. One of these plans is not necessarily always better than the other. When it comes to choosing between an HDHP vs. PPO plan, what is best differs by individual, and it may even vary year-to-year for a person based on his or her circumstances. 

Here, we discuss the benefits and drawbacks of HDHPs and PPOs to help you understand what factors to consider when making your selection.  

HDHP vs. PPO

A high deductible plan is a type of health insurance with higher deductibles but lower premiums. (A deductible is what you have to pay out-of-pocket each month for health services. A premium is what you pay monthly for your healthcare coverage.) With an HDHP, you will pay less money each month for premiums, but you will pay more out-of-pocket for medical expenses before your insurance begins to pay for care. 

A preferred provider organization (PPO) is a plan type with lower deductibles but higher monthly premiums. With a PPO, you pay more money each month but have lower out-of-pocket costs for medical services and may be able to access a wider range of providers.

“HDHPs typically benefit healthier consumers who do not expect to need much medical attention for the year, and the advantages include lower monthly premiums,” explains Susan Beaton, a former VP of provider services at Blue Cross and Blue Shield of Nebraska.”A PPO, especially one with a low deductible, may suit those who expect frequent doctor visits and prescriptions due to something like a chronic condition.”

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