Medicare Advantage HMO Plans

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:

• Your Medicare HMO plan has a Point-of-Service (POS) option.
• Emergency care is required.
• You need out-of-area urgent care.
• You need your dialysis treatment while out of the area.
• Your in-network doctor refers you to an out-of-network specialist.

These plans are extremely popular among Medicare recipients. Here are some reasons why:

• They have low monthly premiums, sometimes even $0.
• Many options include a drug coverage Medicare Part D option.
• The copayment setup may be more affordable.
• No claim forms are necessary to get medical treatment. Your insurance card confirms eligibility.
• Some Medicare HMO plans offer more coverage at a lower cost than Original Medicare.
• The out-of-pocket maximums limit potential medical expenses.
• Some plans include select dental, hearing, and vision coverage.

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:

• You typically only have a small local or regional network of providers that can provide covered care.
• Most out-of-network care expenses are not covered, further restricting the care you can receive.
• Even with an HMO-POS option, you are likely to pay more for out-of-network care.
• You must choose a primary care provider (PCP) who oversees most of your medical care.
• Your PCP acts as a “gatekeeper” to any specialized care, as Medicare HMO plans require PCP referrals to see specialists and other medical providers.
• Benefits, premiums, network participants, copays, and other coverage features often change year to year.
• If your PCP leaves the network, you must choose a replacement, which can disrupt your care plan.
• Medicare HMO plans are not available in every location.

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.

• Copays are dollar amounts you may need to pay when you visit the doctor or receive other medical services. The insurer sets this amount.
• Coinsurance is similar to copays, but the amount is normally a percentage of the Medicare-approved service charge.
• Deductibles are annual out-of-pocket amounts that you are required to pay before your insurance begins to pay for services.
• Out-of-network charges may apply if you seek care from a medical provider outside your plan network.
• Plans with additional services, such as Part D prescription drug, vision, dental, and hearing coverage, may charge higher premiums and a separate drug deductible.

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.

• Initial Enrollment Period (IEP): This seven-month period starts three months before the month of your 65th birthday, the month of your birthday, and ends three months after your birthday month.
• Initial Coverage Enrollment Period (ICEP): This is the enrollment period for those who want to enroll in a Medicare Advantage plan and often occurs at the same time as the IEP for Original Medicare.
• Annual Enrollment Period: This period runs from October 15th through December 7th. Coverage starts the following year on January 1.
• Medicare Advantage Open Enrollment: If you are already enrolled in a Medicare Advantage plan, you can switch plans between January 1st and March 31st.

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.

• CMS: Fact Sheet 2021 Medicare Part B Premiums and Deductibles | Last accessed December 2024
• Kaiser Family Foundation: Medicare Advantage Statistics in 2022 | Last accessed December 2024
• Medicare: Find a 2022 Medicare plan | Last accessed December 2024
• Medicare: Costs at a Glance | Last accessed December 2024
• Medicare: How to Get Prescription Drug Coverage | Last accessed December 2024
• Medicare: Your Medicare Coverage Choices | Last accessed December 2024
• Medicare: Medicare Advantage Plans | Last accessed December 2024
• SSA: Benefits Planner | Last accessed December 2024