The rise of Medicare Advantage plans offers seniors new choices within the complex framework of Medicare options. From personalized care preferences to expanded benefits, more than half of Medicare beneficiaries, or almost 33 million people, have selected Medicare Advantage plans, according to KFF.
Medicare Advantage plans, also known as Part C, typically come with HMO or PPO options that are administered by private insurance companies. These plans are mandated by law to provide the same benefits as original Medicare (Part A and Part B) but frequently include additional benefits like vision or dental coverage.
Medicare Advantage HMOs and PPOs have distinct network and cost choices, so it’s essential to understand these differences to determine the most suitable option based on your budget and health care needs.
[READ Worst Medicare Advantage Plans: How to Find a Good One]
HMO vs. PPO With Medicare: What’s the Difference?
Choosing a PPO plan versus an HMO plan really comes down to what is available in your area and if you want lower costs or more flexibility. Unlike original Medicare, which is standard across the country, Medicare Advantage plans vary by geographical location and can have different benefits.
What is an HMO?
A health maintenance organization, or HMO, commonly offers lower-cost plan options but with limited choices of doctors and health care facilities within the plan’s network. You choose a primary care physician who then coordinates and approves specialist referrals and prior authorizations.
“HMOs tend to have a restrictive network of providers and will generally not cover nonemergent or nonurgent services provided outside of that network,” says David Lipschutz, a co-director at the Center for Medicare Advocacy in Washington, D.C.
Depending on the plan, if you do not use doctors or facilities in-network, you could be responsible for the expenses. So, check carefully if a doctor is in-network before scheduling a visit.
“Some HMOs, however, have a point-of-service option that allows a beneficiary to see providers outside of the network, but for a higher cost,” says Kelli Jo Greiner, a health care policy analyst with the Minnesota Board on Aging in St. Paul.
These HMO subtype plans, such HMO-POS (point-of-service) plans, encourage using in-network providers to keep your costs low, but out-of-network services may be used at a higher out-of-pocket cost.
[READ: What to Do When Medicare Advantage Plans Deny Coverage]
What is a PPO?
Preferred provider organizations, or PPOs, tend to have higher costs than an HMO, but in exchange they give you access to a larger selection of doctors and health care facilities. You have the flexibility to use providers both in-network and out-of-network without a referral.
“PPOs tend to have a network of ‘preferred’ providers but allow enrollees to see providers outside of the network, usually with higher cost-sharing attached,” Lipschutz says.
A PPO may be a better choice for you if you already have doctors in place that you’d like to continue with but they do not participate in a plan’s network. Every plan is different no matter if it’s an HMO or PPO, so always check with your health insurance company to confirm what your plan offers.
[READ: Benefits Offered by Medicare Advantage]
HMO vs. PPO: Key Similarities and Differences
| HMO | PPO | |
| Monthly premium | Plan dependent, but typically lower premiums | Plan dependent, but typically higher premiums |
| Out-of-pocket costs | Typically lower out-of-pocket expenses | Typically higher expenses in exchange for more flexibility |
| Primary Care Doctor | Yes | No |
| Specialist referral | Yes | No |
| Deductible | Typically, but the amount is plan dependent | Typically, but the amount is plan dependent |
| Out-of-pocket maximum | The threshold is lower, but the amount is plan dependent | The threshold is higher, but the amount is plan dependent |
| Drug coverage | Typically, but medications covered and associated out-of-pocket expenses are plan dependent | Typically, but medications covered and associated out-of-pocket expenses are plan dependent |
| Supplemental benefits | Often, but plan dependent | Often, but plan dependent |
How to Choose Between an HMO and a PPO
In 2025, the average Medicare enrollee had an average of 42 different plans to choose from, according to KFF. When considering a Medicare Advantage HMO or PPO plan, individuals should evaluate factors including:
— Co-payments
— Extent of health care provider network
— Maximum out-of-pocket costs
— Monthly premium expenses
While a plan may check all of your boxes, how do you know that which insurance company to choose from? Each year, the Centers for Medicare & Medicaid Services (CMS) releases the Medicare Advantage star ratings, which evaluate the quality of health care services provided by Medicare Advantage insurance companies. This ratings system enables Medicare beneficiaries to compare the quality of available Medicare Advantage health plans, helping them to make decisions that align with their needs.
The U.S. News Honor Roll of Best Medicare Advantage Plans uses the CMS star ratings to analyze insurance companies’ Medicare Advantage plans nationwide. In 2025, U.S. News also consulted with Medicare experts to identify and weigh the most important quality measures for Medicare Advantage consumers. You can search the top-rated plans in your area by searching your state, county or ZIP code.
Here is a snapshot of some of the largest and top-rated companies:
Aetna Medicare Advantage
Aetna offers both HMO and PPO Medicare Advantage plans.
In the 2025 U.S. News star ratings, Aetna received an overall rating of 4 out of 5 stars, as well as 3.6 for its screening and prevention coverage and 3.4 for care continuity. Aetna also received 4.5 stars for customer satisfaction.
Some advantages to Aetna plans include:
— About 69% of its plans come with a $0 premium.
— Around 89% of Aetna plans with a $0 premium also offer prescription drug coverage.
— Some plans offer over-the-counter (OTC) benefits, fitness benefits, a meals-at-home program and basic dental, vision and hearing coverage.
Blue Cross Blue Shield Medicare Advantage
In 2025, Blue Cross Blue Shield (BCBS) has both HMO and PPO plans available, as well as HMO-POS plans.
BCBS Medicare Advantage plans had an overall rating of 4.2 stars out of 5 from U.S. News. In fact, BCBS scores never dipped below 4 across the board; it received 4.1 and 4 stars for screening and prevention and care continuity, respectively, and 5 out of 5 stars for customer satisfaction.
Some advantages to BCBS include:
— More than half of BCBS plans come with a $0 premium.
— Out of all of its plans with medication benefits, 92% have a $0 drug deductible.
— Some plans feature an allowance for expenses such as medical costs, utility bills or food, as well as discounts through the Blue365 program.
Cigna Medicare Advantage
Cigna offers HMO, HMO-POS and PPO plans. Cigna’s Medicare Advantage plans earned 3.7 out of 5 stars from U.S. News overall, and it also received 3.7 stars for customer satisfaction. Care continuity and screening and prevention scores were lower, 3.4 and 3.3, respectively.
Some advantages to Cigna plans include:
— Almost 90% of plans have a $0 premium.
— Plans can include allowances for both preventive and comprehensive dental care, hearing exams with an allowance for hearing aids and vision benefits with an allowance toward eyewear.
— Almost all plans with prescription drug benefits (99%) have a $0 drug deductible.
Humana Medicare Advantage
Humana offers both HMO and PPO options, as well as HMO-POS and PFFS (private-fee-for-service). PFFS plans allow you to see any provider who accepts Medicare and has agreed to the terms set by the insurance company.
For 2025, U.S. News awarded Humana an overall rating of 3.6 out of 5 stars. Humana also received 3.2 stars for screening and prevention, 3.4 stars for care continuity and 3.8 stars for customer satisfaction.
Some advantages to Humana plans may include:
— Some plans have an out-of-pocket maximum as low as $375.
— Nearly all plans come with vision, hearing, dental and fitness benefits.
— It’s widely available, with plans available in 48 states, Washington, D.C., and Puerto Rico.
Kaiser Medicare Advantage
Kaiser Permanente offers HMO, HMO-POS, PPO and PFFS plans.
For 2025, Kaiser Permanente received an overall rating of 4.3 out of 5 stars from U.S. News. Its lowest score was 3.8 for care continuity, but its highest scores reached 4.9 for screening and prevention and 5 out of 5 stars for customer satisfaction.
Some advantages to Kaiser Permanente plans include:
— Most plans with prescription drug benefits (95%) come with a $0 drug deductible.
— Some plans come with multiple benefits, such as discounted gym memberships and free transportation to medical appointments.
— More than half (54%) of Kaiser Permanente plans offer a $0 monthly premium.
United Healthcare Medicare Advantage
United Healthcare offers HMO, HMO-POS, PPO and PFFS plan options.
In the U.S. News star ratings, United Healthcare earned 3.7 out of 5 stars. Its scores for screening and prevention (3.3 stars) and care continuity (3.1) were lower, but its satisfaction rating was 4.3 out of 5 stars.
Some advantages to United Healthcare plans include:
— More than two-thirds (69%) of plans have a $0 premium in 2025.
— Of those $0 premium plans, 84% also offer prescription drug benefits.
— Like Humana, United Healthcare is available in almost every state (except Alaska) and Washington, D.C.
More from U.S. News
Medicare IRMAA: What You Should Know
How Do You Apply for Medicare?
How to Get a Replacement Medicare Card
Medicare Advantage HMOs vs. PPOs: Which Is Right for You? originally appeared on usnews.com
Update 04/17/25: This story was previously published at an earlier date and has been updated with new information.
