Over the course of their existence, there has been considerable volatility in network trends of Medicare Advantage (MA) plans. Way back when they first came out, MA plans operated primarily from Private Fee for Service (PFFS) plans. Subsequently, trends shifted towards Preferred Provider Organization (PPO) plans. Then, more recently, Health Maintenance Organization (HMO) plan trends have increased in popularity. At present, PPO and HMO options dominate the market rendering the original PFFS plan, more or less obsolete and absent from availability.
Regardless of what’s trending at any given moment, both PPO and HMO plan types are available for clients looking for MA coverage. So, what’s the best plan option? The answer is simple: the best choice is the plan that most efficiently meets the needs of the client at a cost they can afford. In other words, both of these plan choices have advantages and disadvantages. This article will strive to provide clarity regarding these plan differences so that agents can help their clients make the most educated choice when it comes to choosing an MA plan.
The HMO Plan
This is an MA plan which operates in a Health Maintenance Organization structure. Under the terms of these plans, beneficiaries use in-network providers who are under agreement to accept the terms of the HMO for payment coverage. HMO-structured MA plans may also provide, but are not required to provide, prescription drug coverage as part of the plan. Beneficiaries are required to have a primary care physician and obtain referrals in order to see a specialist.
The PPO Plan
Is an MA plan which operates in a Preferred Provider Organization structure. Like HMOs, PPO plans utilize a network of providers to help manage plan costs. You can go outside of the network, but will likely be responsible for more of the cost associated with service. In addition, participants are not required to choose a primary care physician.
Now that the key differences have been defined, let’s take a look at the advantages and disadvantages of each. Please see the chart below for details on this topic.
Comparison between HMO and PPO Plans
In summary, regardless of trends, producers should work with clients to determine the best plan for that particular clients’ need and budget. Each plan option has advantages and disadvantages and should be weighed against what best solves each specific client situation.
Senior Market Sales® is well-positioned to help agents with MA plans for the 2020 AEP season. Case in point, they have a wide array of well-known carriers offering competitive products in both the HMO and PPO market. In addition, SMS is always adding new competitive carriers such as recently-added WellCare®. Additionally, regarding those clients that are eligible for, and in need of PDP plans, SMS offers competitive carriers such as Aetna®s PDP plan sold for the 2020 AEP season.
For more information regarding the opportunities to sell MA and PDP products through SMS, please call 1.877.645.0147 to speak with a qualified marketing consultant.
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