Medicare PPO Plan

Medicare PPO Plans are some of the most common plans used for taking care of senior health needs. However, many people aren't exactly sure what a Medicare PPO plan is. Lets take a minute to look at the similarities and differences between PPO Plans and Original Medicare.

A PPO plan, also known as a Preferred Provider Organization, is a health plan that is run by a private company. These plans fall under a larger category known as Managed Care. Within Medicare they are also known as Medicare Part C and as Advantage Plans. Advantage Plans take many shapes and a PPO Plan is only one kind of Advantage Plan. These private company plans were established as an alternative to Original Medicare. They are organized and operated by private companies under rules and regulations that are prescribed by both Federal and State governments. The private company is paid by the government for the senior's care but from a patient's perspective a PPO Advantage Plan is more similar to a traditional health insurance policy than it is to the government's Original Medicare program.

PPO plans were designed as an offshoot from HMOs (Health Maintenance Organizations). Both of these types of plans were born in the 1970's within the private sector as a way to eliminate waste and cut costs in medical care. Critics of managed care have pointed out that managed care has largely failed to control health care costs and that the program has affected the quality of patient care for the worst. Proponents tout managed care as being responsible for both medical advances and an increasingly healthy older population in the United States.

Auntie Lou says, "Pretty interesting that they haven't been proven to work and yet HMOs and PPOs are now everywhere including in Medicare."

Within the framework of an HMO patients are required to use a limited provider network and use referrals to see a specialist. All of a patient's care is "managed" through their primary care physician who sees to it that they get the health care that they need. Patients are required to use doctors, hospitals and other providers within the network. A PPO plan works along the same principal but it is more flexible. In the case of a PPO a patient can see any provider without a referral from their primary care physician. In addition, they can also use out of network providers but their patient costs will be higher if they choose to go out of network. Within Medicare there are both Regional Provider Plans and Local Preferred Provider Plans. Regional Plans are organized according to 26 regional areas established by Medicare. Local Plans only include the insurance company's local service area.

In the private sector, PPOs are generally more expensive than HMOs. Within Medicare some PPO plans premiums cost a little bit more than HMOs and some do not. Compared to Original Medicare both HMO and PPO Plans limit your providers but they are usually cheaper. Original Medicare is accepted by almost all providers and their aren't any restrictions.

When choosing a PPO it's important to consider your financial, health and mental needs. If you had few restrictions when you working over your health care you will probably not embrace the restrictions of a Medicare PPO or HMO. Similarly, if you have had an HMO for years you are already comfortable with these types of insurance plans and their restrictions.