Medicare Advantage Plans Basics: PPOs

You may have never heard of Medicare Advantage PPO plans or may not be quite sure what they are. Likely, you weren’t aware of them before you needed one. Perhaps…

April 19, 2022

Written by Nikki Grillo

You may have never heard of Medicare Advantage PPO plans or may not be quite sure what they are. Likely, you weren’t aware of them before you needed one. Perhaps you have already been enrolled in one and are confused about how they work and their purpose. 

Whether you are looking into a PPO plan because you are 65 and eligible for Medicare or currently enrolled in one, this article can help clear up the confusion and make it much easier for you to understand the different plans.

What’s Medicare Advantage?

Medicare Advantage is a type of insurance that helps cover your medical care costs. It’s sometimes also called Part C or MA. If you have this type of coverage, it means that you get your Medicare benefits through a private insurance company rather than through the government.

There are several different types of Medicare Advantage plans, but PPOs are more popular.

What’s a PPO? 

A preferred provider organization (PPO) plan is a type of managed care health plan that falls under private insurance. Medicare Advantage plans provide comprehensive coverage for Medicare Part A and Part B, prescription drugs and other supplementary healthcare needs.

PPO plans have a network of doctors, hospitals, specialists, and other health care providers that have agreed to provide services to plan members at a discounted rate. You are not required to select a primary care physician (PCP) or get referrals to see a specialist within the network. You can also see out-of-network providers, but you will likely have to pay more for their services.

How Do PPOs Work? 

Your plan will have a list of in-network providers. When you need medical care, you can go to any of these providers and receive the same level of coverage. You will not have to pay more for out-of-network care, but the provider may not be covered at 100%. You may also have to pay a higher deductible.

What Does It Cover?

A PPO plan will cover all of the same services as Medicare Part A and Part B, including hospitalization, doctor’s visits, preventive care, and prescription drugs. In addition, some plans may offer extra coverage, such as dental, vision, or hearing.

Medicare PPOs Costs

PPO plans are typically a little more expensive if you use out-of-network providers. However, they often have lower deductibles and may cover more services than an HMO plan. Plus, there are set costs that come with all advantage plans that may be beneficial: 

Premiums

Unless your plan covers it, you will be responsible for the Part B premium when you join a Medicare Advantage program. Medicare PPO plans can charge their own monthly premium in addition to any plan premiums.

Deductibles

In most cases, you will have to meet a deductible before the insurance company begins to pay its share of your medical costs.

Co-Pays 

You will usually have to pay a co-pay when you see a doctor or go to the hospital. This is a set amount that you will pay for each visit.

Coinsurance

After you meet your deductible, you may have to pay coinsurance for services rendered. This is a percentage of the service cost that you will be responsible for.

Maximum Out-of-Pocket Expenses 

There is a limit on the amount of money you can spend on medical expenses in a year. Once you reach this limit, the insurance company will pay for all further medical costs.

What Advantages Do PPO Plans Provide?

One of the main advantages of PPO plans is that you have the freedom to see any doctor or go to any hospital within its network without getting a referral first. You can also see doctors and hospitals outside of the network, although costs may be higher if you do so.

Another advantage of PPO plans is that they often provide extra benefits that Original Medicare does not cover, such as dental, vision, or hearing. These extra benefits can help to offset the cost of your monthly premium.

What Are The Disadvantages? 

One of the main disadvantages of PPO plans is that they often have higher premiums than other types of Medicare Advantage plans. In addition, you may have to pay more for services rendered by providers outside of the network.

Another disadvantage of PPO plans is that they may not cover all of the services that you need. For example, if you need skilled nursing care or long-term care, you may have to pay for these services out-of-pocket.

Who Benefits From Acquiring A PPO Plan? 

PPO plans are beneficial for people who: 

  • Want more flexibility and freedom in choosing their doctors and health care providers.
  • Do not mind paying more out-of-pocket costs, such as coinsurance and copayments, for seeing providers outside of their insurance network.
  • Travel often or live in an area with limited provider options.
  • Feel comfortable researching providers to make sure they are in-network.
  • Have regular doctor visits and prescription needs.

Medicare PPOs VS Original Medicare

Medicare PPOs are a type of Medicare Advantage Plan. Unlike Original Medicare, which is a fee-for-service plan, PPOs offer health coverage through a network of hospitals, doctors, and other providers. You can see any provider you want, but you will likely pay more out-of-pocket if you do not go to providers in your plan’s network.

PPO plans are similar to Original Medicare in that you have Part A (Hospital Insurance) and Part B (Medical Insurance). However, you also receive Part D (Prescription Drug Coverage) with a PPO plan, which is not included with Original Medicare.

Included In PPO Plans:

  • Parts A and B
  • Part D (Prescription Drugs) is covered most times
  • Additional Coverage
  • Out-of-state care
  • Out-of-pocket max

Included In Original Medicare

  • Part A and B
  • Part D as an add-on
  • Out-of-state care

PPO VS HMO

The main difference between a PPO and an HMO plan is that with a PPO plan, you can see any provider you want, even if they are not in your plan’s network. With an HMO plan, you must use providers in your plan’s network, and you will need a referral to see a specialist.

Another key difference between these two plans is that PPO plans typically have higher premiums than HMO plans. However, PPO plans also typically have lower out-of-pocket costs when you see providers in your plan’s network.

Choosing a PPO Plan

There are a few things you should keep in mind when choosing a Medicare PPO plan:

Your budget: PPO plans have higher premiums than Original Medicare typically has lower out-of-pocket costs. You should consider your budget and whether you are willing to pay more each month for a lower deductible and copayments.

Your health needs: If you have complex health needs or prefer to see specialists without a referral, a PPO plan may be a good choice for you.

Your preferred providers: If you have a doctor or hospital you want to continue seeing, make sure they are in the network for the PPO plan you are considering.

Your prescription drugs: Make sure your preferred pharmacy is in the network for the plan you are considering so that you can continue to get your prescriptions filled there.

Your location: If you live in an area with limited provider options, a PPO plan may be a good choice for you because you will have more flexibility in choosing your providers.

Your travel plans: If you travel often, a PPO plan may be a good choice for you because you will be able to see providers outside of your plan’s network while still being covered.

Who Is Eligible For PPO Plans?

Most Medicare Advantage PPO plans are available to anyone eligible for both Medicare Part A and Part B. This includes people who are 65 years of age or older and those under 65 who have a qualifying disability. Some plans may also be available to people with End-Stage Renal Disease (ESRD). 

How To Enroll In A PPO Plan

If you’re interested in enrolling in a Medicare Advantage PPO plan, you need to first enroll in Part A and Part B. Once you’ve enrolled in original Medicare, you can acquire a PPO plan during any enrollment period. 

Initial Enrollment: You’re first eligible to enroll in Medicare three months before you turn 65. This initial enrollment period lasts for seven months, ending three months after you turn 65. If you don’t enroll during this time, you may pay a late enrollment penalty.

Initial Coverage Enrollment: You have a six-month initial coverage enrollment period to sign up for Part D, the prescription drug benefit. This period begins when you first enroll in Medicare Part B. 

Annual Enrollment: You can also change your Medicare Advantage plan during the Annual Enrollment Period, from October 15 to December 7 each year.

Medicare Advantage Enrollment: Medicare beneficiaries who have already joined a Medicare Advantage plan can switch plans between January 1 and March 31.

Let Us Guide You

If you’re unsure which Medicare plan might be the best fit for you, our team of professionals at Nesso Group can help you. Let us walk you through every step of the process, from assessing which benefits will work best for you to customizing your plan, so all your needs are met. 

With Nesso Medicare, you can rest assured that our team is working to ensure your plan is up to date, depending on your ever-changing situation. Don’t hesitate to reach out now, so our team can get started on the planning process. 

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