How HMOs and PPOs Work in Medicare Advantage in 2026

It might seem hard to pick the right Medicare Advantage plan. It is important to understand all of your choices thoroughly because the year 2026 is approaching quickly. In plain English, this guide shows how 2026 Medicare Advantage HMO plans are different from PPO plans.

What Is Medicare Advantage?

Part C of Medicare, called Medicare Advantage, can be used instead of Original Medicare (Parts A and B). A private insurance company that is accepted by Medicare pays for your care instead of Medicare working directly with doctors. Prescription drug coverage (Part D) is often included in these plans, and they may also offer extras like dental, eye, or gym memberships.

Major 2026 Policy Updates to Know

Before we get into the different types of plans, here are some changes for 2026:

• The biggest changes pertain to insurance. The federal government is increasing payouts to Medicare Advantage plans by about 5.06%, which is more than twice the rate of 2.2% that was first suggested. Such increases could mean that you get better perks or more plan options.
• We are addressing the issue of drug costs. In 2026, the most you will have to pay out of pocket for Part D prescription drugs will go up to $2,100.
• More ways to pay. Part D plans must offer a monthly payment choice starting in 2025 and going through 2026. This way, you don’t have to pay for all of your drugs at once.
• Rates and rules for stars. CMS will update the ratings and rules for plans in 2026. These changes may have an impact on benefits and how plans are accepted.

What Is an HMO?

A Health Maintenance Organization (HMO) is a type of plan that has strict rules:

• To take care of your health, you need to choose a Primary Care Doctor (PCP).
• Usually, your primary care doctor (PCP) has to give you a referral to see an expert.
• Except in emergencies, you have to stay in-network for most care.
• Usually, HMOs have lower monthly fees and out-of-pocket costs.

What Is a PPO?

• A Preferred Provider Organization (PPO) will give you more freedom.
• A referral is not needed to see an expert.
• Other companies will cost more, but you can see them.
• Usually, PPOs have higher rates and may also have higher out-of-pocket costs.

Side-by-Side Comparison

Why You Might Choose Each Plan

HMO Advantages

• You pay less every month and may pay less for care.
• Care is well-coordinated through your PCP.
• Great if you are comfortable staying within a network.

HMO Drawbacks

• You can’t see outside providers (unless it’s an emergency).
• You need referrals for specialists.

PPO Advantages

• More freedom to see any provider, even out-of-network.
• No need for referrals—go directly to specialists.

PPO Drawbacks

• Costs are higher: premiums and out-of-pocket expenses.
• You may need to file claims if seeing out-of-network doctors.

How to Choose between 2026 Medicare Advantage HMO and PPO Plans

1. How important is provider choice?

   • Do you have doctors you trust outside of a network or do you want flexibility? Pick up the PPO.

   • Want easy, cheap medical care? Pick HMO.
2. What’s your budget?

   • Have you run out of funds? Usually, HMOs cost less.

   • Can you spend a little more on flexibility? It may be worth it to get PPO.
3. Do you travel or spend time away from home?
   • Yes, PPOs can give you more coverage when you’re not in your home area.
4. How do you prefer to manage care?

   • Do you prefer having a single doctor manage everything? HMO is beneficial.

   • Want to see specialists directly? PPO fits better.

Final Thoughts

Knowing the difference between HMOs and PPOs in 2026 Medicare Advantage plans will help you choose the plan that fits your needs and your budget the best. While PPOs offer flexibility at a higher cost, HMOs are more organized and cost-effective.

Some plans for 2026 may offer more benefits than ever , thanks to more money and new rules. When registration starts this fall (October–December 2025), carefully weigh your choices to make the best choice.