Medicare Advantage HMO Plans

Fact Checked
Reviewed by: Kelly Blackwell, Certified Senior Advisor®
Updated: January 15, 2022

Is a Medicare HMO plan right for you? Understand your options and plan details.

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Kelly Blackwell
Certified Senior Advisor (CSA)®
Kelly Blackwell
Certified Senior Advisor (CSA)®

Kelly Blackwell is a Certified Senior Advisor (CSA)®. She has been a healthcare professional for over 30 years, with experience working as a bedside nurse and as a Clinical Manager. She has a passion for educating, assisting and advising seniors throughout the healthcare process.

If you are enrolled in Medicare Parts A and B, you can move beyond the basic coverage provided by Original Medicare and get additional benefits with a Medicare Advantage (MA) Plan. There are several different types of Medicare Advantage Plans. All are provided through Medicare-approved private insurance companies, and each type of plan has its own structure.

One of the most popular and least costly of these MA plans is the Health Maintenance Organization (HMO). When you join an HMO, you choose a primary care physician (PCP) from the HMO’s selection of in network physicians. Your PCP will manage your care through the HMO’s network of facilities and doctors.

Who Should Get a Medicare HMO Plan?

A Medicare HMO plan may be a good choice for you if you:

  • Don’t travel or typically need care outside of your service area
  • Don’t mind choosing from in network providers to receive all services
  • Want the least expensive Medicare Advantage option

What is a Medicare HMO Plan?

A Medicare Health Maintenance Organization (HMO) plan is a type of Medicare Advantage Plan, an alternative to Original Medicare. An HMO provides you with access to your Medicare-covered services plus additional benefits through a specific network of physicians and facilities.

Plan structure Medicare Advantage Plan with an area provider network that you must use to access your benefits.
Benefits available All Original Medicare benefits. Usually offers other benefits, such as prescription drug coverage, vision, dental, or hearing.
Cost sharing Plans may have a premium and deductible, but most people have access to at least one zero premium plan in their area. You pay copays for doctor and specialist visits, and copays or coinsurance for drugs. Medicare-covered services count toward your out-of-pocket max.

How HMO plans work

HMOs are often called managed care plans because your primary care physician (PCP) is responsible for managing your care. Your PCP provides the majority of your treatment. For services your PCP doesn’t provide, you get referrals for care from in network specialists. Every Medicare HMO plan is different; the network of physicians is the prevailing feature. Some HMO plans may not require referrals for all specialists, for emergency services, or for regular preventive care services such as mammograms.

Your HMO plan will typically not pay for services you receive from out of network providers, except for urgent or emergency care you need outside of your service area. All Medicare Advantage HMO plans must set an out of pocket maximum amount. If you reach that amount, all Medicare-covered services that you receive in the network are free. Premiums, deductibles, copays and coinsurance for drugs, and copays for additional benefits do not count toward your out of pocket max.

Benefits available with an HMO plan

You have all the benefits from Medicare Part A (hospital insurance) and Part B (medical insurance), including:

  • Inpatient hospital and skilled nursing facility care
  • Home health care
  • Medically necessary outpatient care
  • Preventive care

Most HMO plans offer additional benefits that Medicare doesn’t cover, like routine hearing, dental, and vision exams. These extra benefits are provided within a network, and you may have to pay an additional premium to get more comprehensive coverage. For instance, your HMO plan may cover routine dental exams, but you pay more for services like root canals or dentures. Most plans will offer prescription drug coverage. If you choose a plan that doesn’t, you cannot purchase a standalone Part D plan.

Advantages of a Medicare HMO Plan Disadvantages of a Medicare HMO Plan
  • Cost savings for care received within the plan’s network
  • You don’t have to file claims for in network services
  • Fixed monthly premium and max out of pocket amounts help you plan for costs of Medicare-covered services.
  • You are limited to your plan’s network of providers
  • You must choose a PCP and cannot see specialists without a referral
  • You pay out of pocket for services received out of network

Compare your Medicare options

See how a Medicare HMO compares to Original Medicare and other Medicare Advantage Plan types.

Plan type Costs* Part A coverage Part B coverage Part D coverage Out-of-state care**
Original Medicare Part B premium Yes Yes No Yes
Medicare Advantage HMO Part B premium plus plan premium Yes Yes Usually Emergency only
Medicare Advantage PPO Part B premium plus plan premium Yes Yes Usually Emergency, plus other care if in your plan’s network, or you pay more for out of network
Medicare Advantage PFFS Part B premium plus plan premium Yes Yes Sometimes Emergency, plus other care if contracted with your plan and agrees to treat you.
Medicare Advantage MSA Part B premium plus high deductible Yes Yes No Emergency plus other care but you pay higher cost for out of network if your plan has a network
Medicare Advantage SNP Part B premium Yes Yes Yes Emergency and out-of-area dialysis plus other care if in your plan’s network

*All plans include deductibles, copays and/or coinsurance for services received. Medicare Advantage Plans have an out-of-pocket max that applies to Medicare-covered benefits. There is no cap on what you spend for Original Medicare services, but if you purchase a Medigap plan (which has a monthly premium), it will cover most of Original Medicare’s cost sharing requirements.
**Check with your plan for out-of-state coverage and service area.

Who is Eligible for a Medicare HMO Plan?

A Medicare HMO is one of several types of Medicare Advantage Plans available to Medicare beneficiaries. In order to sign up for a Medicare HMO plan you must first have signed up for Medicare Part A and Part B coverage.

To be eligible for Medicare you must have turned 65 years old and be either a U.S. citizen or a legal resident for at least five years. If you’re under 65, you may also be eligible if you have been receiving disability benefits from either Social Security or the Railroad Retirement Board for a minimum of 24 months. If you’re diagnosed with ALS (Lou Gehrig’s disease) or End Stage Renal Disease (ESRD), you are eligible for Medicare as soon as disability benefits begin.

How Much Does a Medicare HMO Plan Cost?

You can expect to pay the plan’s monthly premium in addition to your monthly Medicare Part B premium. Most Americans have access to a zero premium HMO plan with drug coverage in their area. You’re responsible for copayments and coinsurance for each service or drug received, after you have met your deductible. Most HMO plans require copays for services and treatments, and either copays or coinsurance for medications. Most HMO plans will not pay for services you receive out of network.

See how costs compare for these 2022 HMO plans for a 67 year old female in Chicago, IL

Plan name Monthly premium Deductible Copay Coinsurance Out-of-pocket max
Humana Gold Plus $0 $0 medical, $0 drug deductible PCP: $0

Specialist: $20

100% out of network $ 2,600
AARP Unitedhealthcare $0 $0 medical, $100 drug deductible PCP: $0

Specialist: $35

100% out of network $ 2,950
Cigna Preferred Medicare $0 $0 medical, $0 drug deductible PCP: $0

Specialist: $25

100% out of network $ 3,150

How Do I Enroll in a Medicare HMO Plan?

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.
  • Medicare Advantage Open Enrollment: Medicare beneficiaries who already enrolled in a Medicare Advantage Plan can switch plans between January 1st and March 31st.

Use the Medicare Plan finder 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 or contact the insurance company by phone or email to request a paper enrollment form. You can also enroll by calling Medicare at 1-800-633-4227.

To enroll, you need your Medicare number and the date your Parts A and B coverage began. Your Medicare card has this information.

Who Should Get a Medicare HMO Plan?

Each type of Medicare Advantage plan offers its own advantages and disadvantages. A Medicare HMO plan makes the most sense if you are looking for the lowest possible monthly premiums, don’t mind getting all of your care from your plan’s network of providers, don’t travel much, or need a great deal of specialty care.

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