What is a key difference between HMO and PPO plans in Medicare Advantage?

HMO plans require members to use a network of doctors, which is a fundamental characteristic that distinguishes them from other types of health insurance plans. In an HMO (Health Maintenance Organization), participants are expected to select a primary care physician (PCP) and must obtain referrals from that PCP to see specialists. This structure promotes coordinated care and helps manage costs by directing members to pre-selected and contracted providers within a specific network.

The use of network providers is essential in HMO plans because it typically results in lower out-of-pocket costs for members. However, if members choose to seek care outside of the network, it usually isn't covered except in emergencies. This requirement for utilizing a designated network of doctors is crucial for understanding how HMO plans function and differs markedly from PPO plans, which offer more flexibility with providers.

In contrast, PPO (Preferred Provider Organization) plans provide a wider range of choices and don’t require members to designate a PCP or seek referrals for specialist care, showcasing a notable difference in structure and member experience as compared to HMO plans.