When you sign up for Medicare Advantage, you'll have the choice between either a Health Maintenance Organization plan or a Preferred Provider Organization plan. The difference between them is that an HMO plan typically has a smaller network of doctors included in the plan, and it doesn't cover out-of-network care at all unless it's an emergency. While HMO plans are very popular among people with Medicare Advantage, some people avoid them because of the smaller network size. However, the small provider network brings you several benefits. Below, you'll learn about three benefits of enrolling in an HMO Medicare Advantage plan instead of a PPO.

1. HMO Plans Have Lower Premiums and Co-Pays

One of the biggest benefits of choosing an HMO Medicare Advantage plan is that it almost always costs less than a PPO plan with equivalent benefits. HMO plans cost less for insurers to administer since they don't have to worry about receiving high bills from doctors that are out of the HMO network—this lets them control their expenses better.

In addition, most HMO plans reimburse doctors by capitation, where they receive a set amount of money each month per patient they have under their care. PPO plans reimburse providers on a fee-for-service model, where they're paid each time they see a patient or perform a procedure. Capitation is another way that HMO plans can control their costs better, and they pass the savings onto you in the form of lower premiums and lower co-pays for the services you receive.

2. Doctors in an HMO Network Usually Communicate Better

While needing to see your primary care physician for a referral before you can see a specialist seems like an inconvenience, it can improve the care that you receive. Doctors working together as part of an HMO network are more likely to know one another, which makes it easier for them to communicate effectively. Their electronic health record systems are often linked together, allowing them to instantly send copies of your medical records back and forth.

Seeing an out-of-network doctor on a PPO plan may require you to manually request a copy of your medical records and deliver it to your primary care physician so that they have a copy, which creates a barrier to communication. In an HMO plan, your primary care provider has an easier time coordinating your care with other doctors in the network, which is especially important if you have health conditions that require you to regularly visit multiple specialists.

3. HMO Plans Are Designed to Keep You Healthy

The fact that an HMO plan pays providers by capitation means that they have an incentive to keep you as healthy as possible. They make a set amount of money each month no matter how often you see them or how many procedures they perform. As a result, doctors working together on an HMO plan typically stress preventive care, such as helping people with chronic conditions such as high blood pressure keep it under control through diet, exercise, and medication. Preventive care helps stop chronic conditions from worsening, enabling you to maintain your health as you age.

Overall, the main benefit of choosing an HMO Medicare Advantage plan is that they're a less expensive alternative to PPO plans. In addition to helping you save money, however, they can also help you better maintain your health as you age by stressing preventive care and enabling better communication between the doctors you see. Although many people shy away from HMO plans because of the smaller network size, it's often a benefit—if you're signing up for Medicare Advantage, you should include HMO plans in the potential plans.

For more insight, contact services like Franklin Benefits Group.