What are Medicare Advantage PPO Plans?

Medicare Advantage plans, also commonly referred to as Part C plans, are of many types. One of these is a Preferred Provider Organization plan or a PPO plan. This plan is offered through a private insurance institution that contracts with Medicare to provide healthcare benefits. A PPO plan usually provides additional medical coverage along with what traditional Medicare offers. However, these typically come at an extra cost.

How do PPO Plans work?

Typically, PPO plans have a network of doctors and healthcare institutions that they work with who have contracted with them to offer medical services to their beneficiaries. Plan enrollees are encouraged to use this network to lessen the cost of their healthcare. If they, however, choose to visit a doctor or avail of a medical service out of this network, they may have to pay more for their healthcare services.

If a person isn’t sure about whether their PPO plan will cover a particular medical service offered by a doctor who isn’t part of the plan network, they can request for a pre-service organization determination. This can help them make an informed decision about the costs they will incur before going ahead.

PPO plans generally do not insist that a patient chooses a primary care doctor. Also, in many cases, there isn’t a need for a person to get a referral if they wish to visit a specialist. The advantage is that if they use the services of a plan covered specialist, it will be more economical than if they choose to visit a non-plan specialist.

Another point to note is that usually, under PPO plans, doctors or medical institutions that lie outside the plan network are not compulsorily obligated in any manner to treat a patient who is on a PPO plan. In emergency situations, however, this does not apply, and they will be required to administer treatment.

Can you get Prescription Drug Coverage in a PPO Plan?

Several PPO plans do cover prescription drugs. However, one will have to check with the specific plan they want to enroll in as each has its own rules regarding coverage. If a person has a need to use certain prescription drugs and wants to ensure that their health insurance covers them for the same, they must choose a PPO plan with this facility. In case they opt for a PPO plan without drug coverage, they may not be allowed to sign up for a Medicare Prescription Drug Plan or Part D plan later.

What are the Costs Associated with PPO Plans?

If you have decided to enroll in a Medicare Advantage PPO plan, you may incur the following costs:

  1. Medicare Part B premium You would typically pay a standard premium that would apply if you have enrolled for the first time; you are directly billed for Part B premiums; you are not a recipient of Social Security or Railroad benefits, or you have both Medicare and Medicaid and your premiums are being taken care of by Medicaid. In some instances, such as a situation where you may be liable for a penalty for late enrollment, your Part B premium may be higher than the standard amount.
  2. Monthly Plan premium –While certain Medicare Advantage plans do not charge a premium, others do include a premium that a beneficiary will be required to pay for coverage every month.
  3. Additional costs– Deductibles, coinsurance, or copayments due as part of your specific Medicare Advantage PPO plan will also have to be covered.

What is the Difference between Traditional Medicare, PPO, and an HMO Plan?

Each of these plans has its advantages and differ in costs, coverage, and flexibility offered to the beneficiary.

  1. Medical service provider – Original Medicare allows beneficiaries to make use of any medical facility that agrees with their terms. PPO plans offer the same flexibility but charge more for using providers outside their network. HMO plan holders are usually allowed to only use providers within the plan’s network to be covered by the plan.
  2. Doctors based in the U.S. – Medicare generally allows enrollees to visit doctors based anywhere in the U.S. This is similar to rules that apply for PPO plan holders except that they pay more for doctors who are not part of the plan’s network. HMO plan holders are usually allowed to only visit doctors who are located within their plan service area, except during an emergency, and there is no other alternative.
  3. Referrals– Medicare and PPO plan holders usually do not need to get a referral from a primary care doctor to see a specialist while most HMO plans generally insist on a referral for the same.
  4. Additional Services – Medicare usually doesn’t cover other services such as vision, hearing or dental. PPO and HMO plan holders may enjoy these advantages but may need to pay more in terms of a higher premium or more significant out-of-pocket costs.
  5. Part D plan– Medicare allows enrollees to apply for a prescription drug plan that is a stand-alone plan. PPO and HMO plans, however, may include drug coverage and charge a higher premium.
  6. General charges – Medicare enrollees usually have to pay Part B premiums (Part A premiums may also apply in some instances), along with costs for Part D plans depending on the plan type. PPO plan enrollees tend to pay a higher monthly premium compared to HMO plan holders and also pay a copayment for in-network medical services and coinsurance for services used outside the network. In a HMO plan, the cost-sharing will differ from plan to plan.
  7. Out-of-pockets costs – There is usually no limit set on extra costs that a Medicare enrollee will have to pay out of their own pocket for medical care. PPO plan holders have an annual limit set on the costs that they have to bear on their own for care received within or outside the plan network. HMO plan holders also have a limit set annually on what they need to spend on their own for care received within their plan network.

What are the Advantages of a PPO Plan?

What is the Difference between Traditional Medicare, PPO, and an HMO Plan?

Each of these plans has its advantages and differ in costs, coverage, and flexibility offered to the beneficiary.

  1. Plan enrollees enjoy greater flexibility in picking a doctor or a healthcare provider of their choice with the option of visiting someone outside the plan network.
  2. There is no insistence by the plan on having a primary care physician
  3. Plan enrollees are allowed to visit a specialist without a prior referral

What are the Disadvantages of a PPO Plan?

Each of these plans has its advantages and differ in costs, coverage, and flexibility offered to the beneficiary.

  1. Plan enrollees may be paying higher copayments compared to HMO plan holders
  2. Certain plans may require enrollees to pay a deductible before the plan benefits kick in
  3. A person may have to file a claim to get reimbursed if they see a provider outside the network

While there are pros and cons to having a PPO plan, it all depends on what an individual is looking for from their medical insurance. A PPO plan, for example, could well be the plan for someone who needs to see specialists regularly and enjoys the flexibility of not needing referrals. Also, if cost isn’t a big issue the option of being able to access a broader range of healthcare services can be a huge plus point. The key is to study the different kinds of plans available in your area and find one that covers your specific medical needs adequately.

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