A Medicare Advantage PPO lets you see any doctor or hospital that accepts Medicare without a referral, and pays part of the bill out of network at a higher cost to you. A Medicare Advantage HMO usually covers care only inside its network, often asks you to pick a primary care doctor, and in most cases needs a referral before you see a specialist. For 2027, both plan types can make you pay up to $9,850 for covered in-network care. A PPO can also make you pay up to $14,800 a year when you count in-network and out-of-network care together. Those are federal ceilings, and most plans set lower limits.
You choose between these plan types during open enrollment, which runs October 15 to December 7, 2026, for coverage that starts January 1, 2027. This guide compares the rules side by side, using Medicare.gov's plan descriptions and the official 2027 figures from the Centers for Medicare & Medicaid Services (CMS).
If you are still deciding whether to join Medicare Advantage at all, start with our Medicare Advantage vs Original Medicare comparison. This page assumes you have already picked Medicare Advantage and are choosing a network type.
HMO vs PPO at a Glance
| Feature | Medicare Advantage HMO | Medicare Advantage PPO |
|---|
| Must use the plan's network? | Generally yes | No, but network care usually costs less |
| Out-of-network care covered? | No, except emergencies, out-of-area urgent care, and temporary out-of-area dialysis | Yes, at higher cost sharing, from providers who accept Medicare |
| Primary care doctor required? | Most HMOs require you to choose one | No |
| Referral to see a specialist? | In most cases, yes | No |
| Drug coverage (Part D) | Most include it | Most include it |
| 2027 maximum in-network out-of-pocket limit | $9,850 | $9,850 |
| 2027 maximum combined (in and out of network) limit | Not applicable | $14,800 |
| Average 2026 in-network limit actually set by plans | $4,636 | $6,592 |
| Average 2026 extra monthly premium | $12 | $18 |
Sources: Medicare.gov HMO and PPO plan pages; CMS Final Contract Year 2027 Standards for Part C Benefits, Bid Review and Evaluation (April 22, 2026), Table 3; KFF, "Medicare Advantage in 2026: Premiums, Out-of-Pocket Limits, Supplemental Benefits, and Prior Authorization." KFF averages are for 2026 plans, the latest year KFF has analyzed.
The premium figures are averages across plans and include $0 premium plans. They are paid on top of your Part B premium, which you keep paying with either plan type.
How a Medicare Advantage HMO Works
An HMO (health maintenance organization) is a Medicare Advantage plan run by a private insurer. Medicare.gov says that with an HMO you "generally must get your care and services from doctors, other health care providers, and hospitals in the plan's network." Care outside the network may cost you the full amount.
There are three exceptions where an HMO must still cover care from outside its network:
- Emergency care
- Urgent care when you are outside the plan's service area
- Dialysis when you are temporarily outside the service area
Primary care doctor and referrals
Most HMOs ask you to choose a primary care doctor. That doctor coordinates your care and, in most plans, writes the referral you need before a specialist visit is covered. Some services do not need a referral. Medicare.gov gives the yearly screening mammogram as an example.
If a doctor leaves your HMO's network during the year, the plan has to tell you, and you can choose another doctor in the plan.
HMO-POS plans
Some HMOs are point-of-service plans, labeled HMO-POS. Medicare.gov says these "may allow you to get some services out-of-network for a higher copayment or coinsurance." The out-of-network benefit in an HMO-POS is usually narrower than a PPO's. Read the plan's Evidence of Coverage to see which services are covered out of network and what you pay.
How a Medicare Advantage PPO Works
A PPO (preferred provider organization) is also a Medicare Advantage plan run by a private insurer, and it also has a network. The difference is what happens when you leave it.
Medicare.gov says that in a PPO you "can use any doctor or hospital that accepts Medicare," but out-of-network providers cost more. The provider has to participate in Medicare or accept assignment. Medicare.gov also recommends that you contact your plan before using an out-of-network provider for a covered service, to confirm the service is medically necessary and covered.
PPO members:
- Do not have to choose a primary care doctor
- Do not need a referral to see a specialist
- Are always covered for emergency and urgent care
Local vs regional PPOs
Almost every PPO you will see is a local PPO, which serves specific counties. Regional PPOs cover an entire multi-state region set by CMS. They are a small slice of the market. MedPAC's July 2026 data book counted about 163,000 people in regional PPOs in February 2026, down 31% from a year earlier. KFF puts regional PPOs at less than 1% of people in individual Medicare Advantage plans with drug coverage in 2026.
2027 Out-of-Pocket Limits by Plan Type
Every Medicare Advantage plan must cap what you pay each year for covered Part A and Part B services. CMS sets the ceiling, and each plan picks its own limit at or below it. CMS finalized the 2027 limits on April 22, 2026.
| Plan type | 2026 maximum | 2027 maximum |
|---|
| HMO and HMO-POS, in-network | $9,250 | $9,850 |
| PPO, in-network | $9,250 | $9,850 |
| PPO, combined in and out of network | $13,900 | $14,800 |
Source: CMS Final Contract Year 2027 Standards for Part C Benefits, Bid Review and Evaluation, Table 3, and the CY2026 equivalent.
Here is what that means in practice:
- HMO: The in-network limit is your only limit. Out-of-network care that the plan does not cover, outside the emergency and urgent care exceptions, does not count toward it, so there is no cap on those bills.
- PPO: You have two limits. In-network spending counts toward the in-network limit. In-network and out-of-network spending together count toward the combined limit.
Neither limit includes your monthly premium, your Part B premium, or what you pay for prescription drugs. Drugs have their own cap: the Part D out-of-pocket cap is $2,400 for 2027, up from $2,100 in 2026, and it applies inside a Medicare Advantage plan with drug coverage too.
In 2026, plans set their limits well below the ceiling on average. KFF found the average in-network limit was $4,636 for HMOs and $6,592 for PPOs, and the average combined limit for PPOs was $9,825. Your plan's actual 2027 limit is listed in its Summary of Benefits and on Medicare Plan Finder. For the full tier structure, see our 2027 Medicare Advantage out-of-pocket maximum guide.
What Out-of-Network Care Costs in a PPO
There is no single out-of-network price. Each PPO sets its own copays and coinsurance, and the gap between in-network and out-of-network cost sharing varies a lot from plan to plan. A common pattern is a flat copay in network and a percentage of the bill, such as coinsurance, out of network. Check these lines in the plan's Summary of Benefits:
| Service to check | Why it matters |
|---|
| Specialist visit, in and out of network | The most common reason people pick a PPO |
| Inpatient hospital stay, in and out of network | Often the largest bill in a bad year |
| Outpatient surgery | Out-of-network coinsurance on surgery adds up fast |
| Out-of-network deductible | Some PPOs have one, some do not |
| Combined out-of-pocket limit | Your worst case for the year |
One more cost to know about: Medicare.gov says that for chemotherapy, dialysis, and skilled nursing facility care, a Medicare Advantage plan cannot charge you more than Original Medicare would. That rule applies to both HMOs and PPOs.
Prior Authorization Applies to Both
Skipping referrals in a PPO does not mean skipping approval. Prior authorization, where the plan must approve a service before it pays, is separate from a referral. KFF found that 99% of Medicare Advantage enrollees were in plans that require prior authorization for some services in 2026. That includes PPO members.
Medicare.gov lists two protections that apply to both plan types:
- An approval has to stay valid for as long as the treatment is medically necessary, and the plan cannot require more approvals for that treatment.
- If you switch plans during a course of treatment, the new plan must wait at least 90 days before it can require a new prior approval.
If a plan denies a service, you can appeal. Our guide to a Medicare Advantage prior authorization denial walks through the steps.
Which People Each Plan Type Tends to Fit
There is no right answer for everyone. These are patterns, not recommendations.
An HMO may fit if:
- All of your doctors and your preferred hospital are in the HMO's network
- You are comfortable with a primary care doctor coordinating specialist visits
- You stay in the plan's service area most of the year
- A lower out-of-pocket limit and premium matter more to you than flexibility
A PPO may fit if:
- You see a specialist or hospital that is outside every HMO network near you
- You want to see specialists without a referral
- You spend part of the year away from home and want routine care covered there
- You accept a higher premium or higher cost sharing in exchange for that choice
More people pick HMOs. KFF reports that in 2026, 61% of people in individual Medicare Advantage plans with drug coverage were in HMOs, 38% were in local PPOs, and less than 1% were in regional PPOs.
Step-by-Step: Comparing HMO and PPO Plans for 2027
- List your doctors, hospitals, and drugs. Write down every doctor you saw in the last year, the hospital you would want to go to, and each prescription with its dose.
- Open Medicare Plan Finder. Go to medicare.gov/plan-compare and enter your ZIP code. Plans are sold by county, so what is available to you depends on where you live.
- Filter by plan type. Plan Finder lets you view HMO and PPO plans. Note which 2027 plans are offered in your county.
- Check each plan's network. Search each plan's provider directory for your doctors, then call the doctor's office to confirm they will be in that plan's network in 2027. Networks change from year to year.
- Compare the out-of-pocket limits. Write down the in-network limit for each plan, and the combined limit for each PPO.
- Compare costs for the services you use. Look at specialist, hospital, and outpatient surgery cost sharing, in and out of network.
- Check drug costs. Enter your drugs in Plan Finder to see the estimated yearly cost under each plan.
- Read the referral and prior authorization rules. These are in the plan's Evidence of Coverage.
- Enroll by December 7, 2026. You can join through Plan Finder, by calling 1-800-MEDICARE (1-800-633-4227), or by contacting the plan. Coverage starts January 1, 2027.
Free, unbiased counseling is available through your State Health Insurance Assistance Program (SHIP). You can find yours at shiphelp.org.
If You Pick the Wrong Type
If you are in a Medicare Advantage plan on January 1, 2027, the Medicare Advantage Open Enrollment Period runs January 1 to March 31, 2027. During it, you can make one switch to another Medicare Advantage plan, including from an HMO to a PPO or the reverse, or drop Medicare Advantage and return to Original Medicare. For what is changing across plans next year, see Medicare Advantage plans in 2027.
Frequently Asked Questions
Is a Medicare Advantage PPO better than an HMO?
Neither is better in general. A PPO gives you more choice of doctors and no referrals. An HMO usually has a lower out-of-pocket limit and a lower premium on average. KFF's 2026 data show an average in-network limit of $4,636 for HMOs and $6,592 for PPOs, and average premiums of $12 and $18 a month. Which one fits depends on your doctors, where you spend the year, and how much you want to pay.
Can I see a doctor outside my network with a Medicare Advantage HMO?
Generally no, unless your HMO is an HMO-POS plan with out-of-network benefits. A regular HMO covers out-of-network care only for emergencies, urgent care outside the service area, and temporary out-of-area dialysis. Other out-of-network care may cost you the full amount.
Do I need a referral in a Medicare Advantage PPO?
No. Medicare.gov says PPO members do not need a referral to see a specialist and do not have to choose a primary care doctor. The plan may still require prior authorization for some services.
What is the 2027 out-of-pocket maximum for a Medicare Advantage PPO?
CMS set the 2027 maximum at $9,850 for in-network services and $14,800 combined for in-network and out-of-network services. Each PPO picks its own limits at or below these figures.
Does a Medicare Advantage PPO cover me when I travel?
All Medicare Advantage plans cover emergency and urgent care anywhere in the United States. A PPO also covers routine care from out-of-network providers who accept Medicare, at higher cost sharing. Most Medicare Advantage plans do not cover routine care outside the United States, so check the plan's Evidence of Coverage before a trip abroad.
Can I add a separate Part D plan to a Medicare Advantage HMO or PPO?
No. Medicare.gov says that if you join an HMO or PPO without drug coverage, you cannot also join a separate Medicare drug plan. Choose a plan that includes drug coverage if you take prescriptions.
Can I switch from an HMO to a PPO after January 1?
Yes, once. If you are in a Medicare Advantage plan, you can switch to another Medicare Advantage plan, such as a PPO, during the Medicare Advantage Open Enrollment Period, January 1 to March 31, 2027.
Do I still pay the Part B premium with a Medicare Advantage plan?
Yes. You keep paying your Part B premium with either an HMO or a PPO, plus any premium the plan charges. The standard Part B premium is $202.90 a month in 2026. CMS had not published the 2027 amount as of early November 2026; it usually announces it in November.
