Learn about Medicare Advantage HMO plans, their pros and cons, and how to enroll.
Medicare Health Maintenance Organization (HMO) plans are a type of Medicare Advantage Plan that offers Medicare benefits through health insurance companies. You must be enrolled in Medicare Parts A and B to join a Medicare Advantage Plan. Your Part B Medicare premiums are part of the fixed payments that Medicare makes to these companies for your health insurance.
HMO plans can provide comprehensive coverage for everything from doctor’s visits, preventive care, and lab services to hospital stays and nursing facility care. Plus, some plans offer optional services, like drug and dental coverage. However, costs, eligibility, coverage restrictions, and enrollment requirements should be reviewed to determine whether a Medicare HMO plan meets your needs.
After joining, if you decide this plan isn’t the best option for your circumstances, you must wait until an applicable annual enrollment period to transfer to another approved Medicare plan. Review the following information about HMO plans carefully to better understand if this coverage will work for you.
A Medicare HMO plan is one of the four available Medicare Advantage plans. These plans are also referred to as Medicare Part C, which includes coverage for Parts A and B, called Original Medicare. Some Medicare HMO plans also provide Part D prescription drug coverage.
With a Medicare HMO plan, private insurance companies manage your healthcare services through a select approved group of healthcare providers and medical facilities. This is called in-network care. You may be able to receive covered out-of-network services in the following circumstances:
These plans are extremely popular among Medicare recipients. Here are some reasons why:
When choosing Medicare coverage, consider out-of-network costs, in-network doctor availability, and other restrictions. Here are some of the disadvantages of Medicare HMO plans:
The criteria to qualify for Medicare HMO plans includes enrollment in Original Medicare Parts A and B. If you are eligible for Medicare, you can opt to receive your benefits through a Medicare Advantage Plan.
Location plays a role, as well. You must live in an area serviced by state-licensed and Medicare-approved HMO plan providers for no less than six months out of the year. You can search for an available plan in your area on the Medicare website.
Because you must be enrolled in Medicare Parts A and B to join an HMO plan, you’ll pay a Part B premium payment each month. The typical monthly premium is $170.10, although higher earners pay more. Note that Part A is usually premium-free, as long as you paid sufficient Medicare taxes prior to enrolling.
Private insurers offering HMO plans may also charge a monthly premium. In 2021, the average cost for Medicare Advantage plans was $60 per month. HMO plan premiums are usually lower, and in many cases, there is no premium. Plus, some insurers cover a portion of their plan members’ Part B premiums.
To understand the true cost of an HMO plan, consider ongoing expenses in addition to monthly premiums, such as copays and deductibles which apply when you receive services.
Out-of-pocket expenses for Medicare-covered services are subject to a yearly maximum. As of 2022, that amount was $7,550 for in network services. Medicare Advantage insurers can set a lower limit. For enrollees in HMOs, the average out-of-pocket (in-network) limit is $4,566 in 2021.
Some Medicare HMO plans have no deductibles at all.
These costs vary from state to state, so it’s important to compare the plans available in your area for an accurate cost estimate.
The government’s Medicare Plan finder makes this process simple. Use this online tool to research available HMO plans in your area. When you’ve chosen a plan, go to the insurer’s website to check for online enrollment options.
If online enrollment isn’t available, contact the insurance company by phone or email to request a paper enrollment form. Complete the form you receive and return it to the insurer to join. You can also enroll by calling Medicare at 1-800-633-4227.
To enroll in a Medicare Advantage plan, you first need to be enrolled in Original Medicare Part A and Part B. After you’re enrolled in Original Medicare, you can enroll in an HMO plan during your Initial Enrollment Period or during other enrollment periods throughout the year.
To enroll, you need your Medicare number and the date your Parts A and B coverage began. Your Medicare card has this information.
People in relatively good health who travel very infrequently and have no current need for specialty care may benefit from an affordable Medicare HMO plan. Join a Medicare HMO plan that you have thoroughly researched.
Look for any stated premiums and deductibles to assess affordability. Be sure that the out-of-pocket maximum isn’t beyond your means. If you choose a plan with Part D coverage, ensure that your medications are listed in the drug formulary. Other things to consider are the size of the network, the PCP choices and availability, and whether preferred doctors and in-network healthcare facilities are close enough to access without hardship.
Roseann Birch has worked in the insurance industry for more than 35 years. In 2006, she moved to selling insurance and, by 2009, Birch made Medicare her area of expertise after observing the struggles of older adults to understand Medicare. Although many adults age 65 and older are eligible for Medicare, nearly just as many don’t understand how it works.
Birch has learned the ins and outs of Medicare and its variations and supplements to help beneficiaries and their families understand benefits. She finds there is often misinformation and makes it her mission to clear up the confusion so that everyone can enjoy the full extent of Medicare benefits.