Medicare Advantage Plan Types
Key Takeaways
- Medicare Advantage offers private insurance plans as an alternative to Original Medicare. Common Medicare Advantage plan types include HMO, PPO, HMO-POS, and PFFS.
- Specialized plan types include Medical Savings Accounts (MSAs) for high-deductible plans and Special Needs Plans (SNPs) for dual-eligible individuals, chronic conditions, or institutional care.
- Costs depend on premiums, deductibles, copays, coinsurance, and network fees. Medicare Advantage plans cap annual out-of-pocket expenses.
- Enrollment is available during the Initial Enrollment Period, Annual Enrollment (Oct 15–Dec 7), and Medicare Advantage Open Enrollment (Jan 1–Mar 31), with options to switch or modify plans.
The most common Medicare Advantage plan types include HMO, PPO, HMO-POS, and PFFS. Eligible beneficiaries can also enroll in a SNP or MSA plan. Each type offers unique benefits, with different approaches to cost-sharing, provider networks, and coverage options. We will review each plan type, how to find the right one for you, and how to enroll.
What Is Medicare Advantage?
People eligible for Medicare can opt for private health insurance plans called Medicare Advantage instead. Medicare Advantage has steadily increased in popularity since 2007. In 2024, 54% of Medicare-eligible consumers were enrolled in Medicare Advantage.
These plans cover as much as Original Medicare but often feature more benefits like prescription drug, dental, or vision coverage. Medicare Advantage plans may also have more relaxed eligibility criteria for services than Original Medicare.
However, benefits and terms vary between plans. Understanding the differences between types of Medicare Advantage plans can help you choose the right one. The type of plan affects where you can get care, how much you pay, and whether you need pre-approval for services. Details also depend on the insurance carrier and location.
Common Medicare Advantage Plan Types
| PPO | HMO | PFFS | HMO-POS | |
|---|---|---|---|---|
| Average premium | High | Low | High | Low |
| Average network size | Large | Moderate | Large | Large |
| Designated primary care physician | Not required | Required | Not required | Required |
| Referrals to seek specialist care | Not required | Required | Not required | Required |
| Out-of-network care coverage | Partially covered | Not covered | Covered | Partially covered |
Before committing to a plan, it’s important to understand the differences between each Medicare Advantage plan type.
HMO
Medicare Advantage HMO plans offer lower premiums but are more restrictive on where you can receive care. HMOs require a designated in-network primary care physician, and you typically need a referral to get specialty care. The plan do not cover out-of-network care except in an emergency. This Medicare Advantage plan type is ideal for those on a strict budget, who live near convenient in-network providers, and who need minimal specialized care.
PPO
A PPO plan uses a preferred provider network, but you can get out-of-network care at a higher cost. You do not typically need a referral to seek specialist care. PPO plans often have higher premiums than HMO plans because of this flexibility. A PPO Medicare Advantage plan suits those who need specialized care, want out-of-network options, and can afford higher premiums.
HMO-POS
An HMO-POS plan pairs the benefits of an HMO with slightly more freedom. Most of your care needs to be in network, but you can get some out-of-network services covered at a higher cost. You still need a designated primary care physician, and you may need a referral or prior approval before going outside the network. These plans suit those who have a good HMO network nearby but want the option of out-of-network care.
PFFS
A Medicare Advantage PFFS plan decides how much you pay for services. You can visit any provider that accepts Medicare and your plan’s terms. You’ll pay the provider directly for your care. You don’t need to designate a primary care physician or get a referral for specialists. Since PFFS costs can add up, this plan suits consumers with a higher budget and minimal healthcare needs.
Ready for a new Medicare Advantage plan?
Other Medicare Advantage Plan Types
In addition to the four most common Medicare Advantage plan types, some people may also qualify for more specialized options.
Medicare Medical Savings Accounts (MSA)
Similar to Health Savings Accounts (HSAs), MSAs help people with high-deductible health plans pay for their expenses. Each year, Medicare deposits a set amount into your MSA, which you can use to pay for covered services before meeting your deductible. Excess money rolls over each year.
MSA plans don’t use a provider network, so you can visit any provider that accepts Medicare. MSAs also do not provide prescription drug coverage, so this Medicare Advantage plan type works for budget-conscious Medicare consumers who don’t expect to need extensive healthcare.
Medicare Special Needs Plans (SNP)
SNPs serve specific populations. Consumers must meet certain requirements to qualify for an SNP, and each plan designs its benefits around those particular needs. All SNPs include Part D prescription drug coverage. There are three types of SNP plans:
- Dual Eligible SNP (D-SNP): A D-SNP can help people with Medicare and Medicaid make the most of their benefits. They can help dually eligible consumers simplify their benefits, appeals, and coverage.
- Chronic Condition SNP (C-SNP): These plans serve people with chronic conditions, like lung disorders, heart failure, or cancer. C-SNPs cover additional services and specialists for those specific needs. For example, a diabetes-focused C-SNP includes foot care, insulin management, and glucose monitoring.
- Institutional SNP (I-SNP): I-SNPs support people who live or are expected to live in a healthcare facility for 90 days or more. Examples of I-SNP facilities include a skilled nursing facility, an inpatient psychiatric facility, or a facility for people with intellectual disabilities.
Costs to Consider For Medicare Advantage Plan Type
Each Medicare Advantage plan determines its own cost structure. Beyond premiums, your total expenses include deductibles, cost-sharing, and network fees.
- Premiums: Medicare Advantage plans often require an additional premium, though some Medicare Advantage plans don’t charge a premium at all. HMO and HMO-POS plans usually have lower premiums because they limit care to in-network providers with negotiated rates. On the other hand, PPO and PFFS plans typically have higher monthly costs to account for greater flexibility in care.
- Deductibles: This is the amount you pay before your Medicare Advantage plan begins cost sharing. If you have a high-deductible health plan, an MSA can help cover the out-of-pocket expenses before reaching your deductible. Not all services count toward the deductible.
- Copays: Copays are flat fees you pay per service. Plans often charge lower copays for in-network or routine care, while out-of-network or specialist care incurs higher fees. For example, a routine care appointment might have a $0 or $20 copay, while a specialist visit may cost $40.
- Coinsurance: This is the percentage of the service cost that you pay. For example, your Medicare Advantage plan may cover 70% of the service cost, leaving you responsible for paying the remaining 30% out of pocket. HMO, PPO, and HMO-POS plans charge a lower percentage for in-network services.
- Out-of-network fees: Some plans cover out-of-network care at a higher cost, while others don’t cover it at all. For example, if you have an HMO plan, you’ll pay 100% of the cost for out-of-network care. Non-network plans, like MSAs, don’t have additional out-of-network fees.
- Out-of-pocket maximums: Unlike Original Medicare, Medicare Advantage plans limit how much you spend out of pocket each year for covered care. In 2025, you won’t pay more than $9,350 for covered services. However, many plans set lower limits.
Which Medicare Advantage Plan Type Is Best For You?
Each Medicare Advantage plan type has its own benefits and drawbacks, so the “best” option is the one that suits your healthcare needs, budget, and preferences. The plan network should be your first consideration. Do you live near a reputable healthcare facility that participates in an HMO plan? Or would you prefer more flexibility to see specialists and out-of-network providers?
Understand your total costs, too. Consider the plan’s premium, network fees, deductible, and out-of-pocket maximum, as well as whether you are eligible for plans that may reduce your costs like a MSA or Special Needs Plan.
Finally, consider your own healthcare needs. Do you only use your insurance for preventative services, or do you need specialized care too? Would you like prescription drug, vision, or dental coverage? All of these factors inform whether an HMO, HMO-POS, PPO, or PFFS best meets your needs.
Once you’ve identified your ideal Medicare Advantage plan type, you can narrow your options down further. Make a list of your preferred healthcare providers and find out if they’re in your plan’s network. Research potential insurance companies’ reputations and customer reviews. Understand how the plan’s cost structure fits into your budget.
Enrolling In Medicare Advantage
Once you’ve identified your ideal Medicare Advantage plan type, you can narrow your options down further. Make a list of your preferred healthcare providers and find out if they’re in your plan’s network. Research potential insurance companies’ reputations and customer reviews. Understand how the plan’s cost structure fits into your budget.
After all your research, it’s time to enroll. You have a few options.
- Initial Enrollment Period: The Initial Enrollment Period (IEP) is the easiest time to enroll for most people. This period lasts for 7 months, starting 3 months before your 65th birthday.
- Annual Enrollment Period: From October 15 to December 7 each year, Original Medicare and Medicare Advantage plans are open for enrollment through the Annual Enrollment Period (AEP). You can join Medicare Advantage for the first time or switch plans.
- Medicare Advantage Open Enrollment Period: If you already have Medicare Advantage, you can change your coverage between January 1 and March 31. This period allows you to switch between Medicare Advantage plans, add or drop Part D coverage, or change back to Original Medicare.
Putting It All Together
Understanding how the most common Medicare Advantage plan types differ can help you decide which one best suits your needs. HMO and HMO-POS plans generally only cover in-network care, while PPO plans allow out-of-network care for a higher cost. PFFS plans don’t use a provider network.
Even within these plan types, your benefits and coverage terms vary depending on your area and insurance company. A licensed insurance agent or broker can help you understand each plan type and choose the right option for your needs.