Ron Elledge is a seasoned Medicare consultant and author of “Medicare Made Easy.” As a Medicare expert, he regularly consults beneficiaries on Medicare rules, regulations, and strategies.
People who are enrolled in Medicare Parts A and B are able to choose to move beyond the basic coverage provided by original Medicare and choose to purchase additional benefits via one of the Medicare Advantage plans available in their state. There are several different types of Medicare Advantage plans. All are provided through private insurance companies, and each type of plan has its own structure.
One of the most popular of these various plans is the Medicare HMO, or Health Maintenance Organization. Beneficiaries who choose an HMO will choose a primary care physician (PCP) from the HMO’s selection of physicians in their area, and that physician will then manage their care through that pre-existing network of facilities and doctors.
Medicare HMO plans are generally among the least costly of the Medicare Advantage Plans. Continue reading to learn more about what these plans offer and whether one is right for you.
What is a Medicare HMO Plan?
Medicare HMO plans provide their beneficiaries with access to their Medicare services through a specific network of physicians and facilities. They are often called managed care plans because the primary care physician is responsible for managing the beneficiary’s care. The primary care physician provides the majority of their patients’ treatment and in most cases provide referrals for care from specialists within the network for services that they are not able to provide. 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.
Advantages of a Medicare HMO Plan
Health Maintenance Organization plans were created to offer cost savings to their beneficiaries, and the reduced expense is one of the primary advantages of selecting a Medicare HMO plan. Choosing an HMO reduces the need to fill out time-consuming paperwork or claim forms, as once the beneficiary provides their proof of insurance card at the point of service, there is no need to complete or submit any further claims. The beneficiary also has the security of knowing that their healthcare expenses will be limited to a fixed monthly premium; copayments and coinsurance charges vary depending upon the services received.
Disadvantages of a Medicare HMO Plan
Though choosing an HMO provides beneficiaries with reduced costs, the savings come at the expense of their freedom of choice. In traditional HMO’s enrollees are required to identify a primary care physician who is their point of contact for all services. The PCP must provide a referral for specialty care, and the specialty care provider will also need to be from within the HMO’s existing network. Some HMOs do permit their enrollees to seek specialty care without a referral and from outside of the network, but in those cases the patient’s costs will be higher. The same restrictions exist for the hospitals and medical facilities where patients can be treated. With the exception of emergency treatment, in most cases patients who choose to seek care from a non-network provider or facility will have to pay the full cost of their care out of pocket.
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 an individual must first have signed up for Medicare Part A and Part B coverage.
To be eligible for Medicare you must either have turned 65 years old and either a U.S. citizen or a legal resident for at least five years. Those who are under 65 may also be eligible if they have been receiving disability benefits from either Social Security or the Railroad Retirement Board for a minimum of 24 months, although those diagnosed with ALS (Lou Gehrig’s disease) are eligible for Medicare as soon as those disability benefits begin. Patients who have been diagnosed with End-Stage Renal Disease are generally not eligible for any Medicare Advantage plan.
How much does a Medicare HMO Plan cost?
The amount that you will pay to enroll in a Medicare HMO plan will depend upon several different factors. Because every plan is different, potential enrollees need to ask the following questions:
- Is there a monthly premium, and if so, how much is it?
- Does the plan pay all or part of the Medicare Part B monthly premium?
- Is there a yearly deductible, and if so, how much is it?
- What is the copay/coinsurance that is charged for each visit or service?
- What is the annual limit on how much you will pay in out-of-pocket costs?
Beyond asking these questions, those considering an HMO should consider their own medical and health care needs. If you have pre-existing medical conditions and require specialty care, you will need to consider whether you are likely to follow the plan’s rules and restrict yourself to only using network providers. If you choose to go to an out-of-network provider, you may also want to ask whether they’ll accept the assignment, and if not whether it is worth it to you to pay the additional out-of-pocket expense to continue receiving care from them.
How do I enroll in a Medicare HMO Plan?
To enroll in a Medicare Advantage Plan, you first must have Medicare Part A and Part B. Following this step, you can only sign up for a Medicare HMO plan during either your Initial Enrollment Period or during certain enrollment periods that happen each year, though there are Special Enrollment Periods available under certain circumstances.
- Initial Enrollment Period – Once you turn 65 you become newly eligible for Medicare. The Initial Enrollment Period refers to a 7-month period that begins three months before the month you turn 65, the month in which you turn 65, and the three months after the month in which you turn 65.
- Initial Coverage Enrollment Period (ICEP). This enrollment period is for those enrolling in a Medicare Advantage plan. For most, this period occurs at the same time as their Initial Enrollment Period for Original Medicare Parts A and B. But, for those that delay their Part B enrollment, the ICEP for Medicare Advantage begins the three-month period before their Part B start date and ends the last day of the month before their Part B coverage starts. If enrollment happens even one day after Part B begins, individuals will have to wait until the next AEP to enroll.
- Annual Enrollment Period – There are two enrollment periods that occur every year during which you can enroll in a Medicare HMO plan or make changes to an existing plan. The first is between October 15th and December 7th, and during that time Medicare Advantage-eligible individuals may enroll in, dis-enroll from, or change to another Medicare Advantage plan. There is also a Medicare Advantage Open Enrollment Period between January 1st and March 31st, and during that time Advantage Plan members can make only one change (such as switching from one Medicare Advantage Plan to another, or disenrolling from their Advantage Plan). The MA-OEP is not for non-Advantage Plan members, non-members cannot enroll in MA Plans during this period.
- Special Enrollment Periods – These enrollment periods are available to individuals who have experienced specific events such as moving to an area that is not in your plan’s service area or losing their insurance coverage as a result of a job loss.
When you are ready to sign up for a Medicare HMO plan, you can do so online.
Who should get a Medicare HMO Plan?
Each type of Medicare Advantage plan offers its own advantages and disadvantages, but the beneficiaries for whom a Medicare HMO plan makes the most sense are those that are looking for the lowest possible monthly premiums, those that don’t travel much, or need a great deal of speciality care.
HMO’s may not be a fit for those who are looking for freedom in the selection of doctors, hospitals, and clinics, or are concerned with a known budget for their yearly cost of health care. If you prefer to stay with your own physician or to make your own decisions about what specialists you want to see, it is a good idea to review the individual HMO’s list of in-network physicians to see whether your favorites are on the list — and remember that if they leave the network, you will not be able to follow them without switching plans during the next AEP or MA-OEP or incurring additional charges.
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- https://www.medicare.gov/sign-up-change-plans/types-of-medicare-health-plans/medicare-advantage-plans, last accessed September 2020.