Medicare Advantage HMO Plans

Fact Checked

If you are enrolled in Medicare Parts A and B for your health care, 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 MA plans 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 provider network. 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 health care 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 HHMO 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, or health maintenance organizations, are often called managed care plans because your primary care provider is responsible for managing your care. First, you must choose a primary care provider in the network. 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, and the network of health care providers is the prevailing feature. Some HMO plans may not require referrals for all specialists, emergency services, or regular preventive care services, such as mammograms.

Unlike PPO plans, HMO plans may not pay for services you receive from out-of-network health care 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
  • Primary care
  • Preventive care

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

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 primary care provider (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, including a Point-of-Service POS option, Preferred Provider Organization (PPO) and Private Fee For Service (PFFS) plan among others.

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 (Preferred Provider Organization) 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 (Private Fee-for-Service) 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 (Medical Savings Account) Part B premium plus high deductible Yes Yes No Emergency plus other care but you pay a higher cost for out of network if your plan has a network
Medicare Advantage SNP (Special Needs Plan) 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 Medicare Part A and Part B services, but if you purchase a Medicare Supplement Insurance (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 plan from a health maintenance organization is one of several types of Medicare Advantage Plans available to Medicare beneficiaries. In order to sign up for an HMO advantage 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 United States citizen or a legal resident for at least five years. If you’re under age 65, you may also be eligible if you have been receiving disability benefits from either Social Security or the Railroad Retirement Board (RRB) for a minimum of 24 months. If you’re diagnosed with amyotrophic lateral sclerosis (ALS or 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 $0 monthly -premium maintenance organization HMO plan with prescription drug coverage in their area. With this type of advantage plan, 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 certain services and treatments, and either copays or coinsurance for medications. Most HMO plans may charge for services you receive out of network, so there are some out-of-pocket costs. Drug coverage may not be included. If an over-the-counter OTC benefit is important to you, be sure to evaluate the plan to see if this is an option.

See how costs compare for these 2023 HMO plans for a 67-year-old female in Chicago:

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

Specialist: $15

100% out of network $ 2,500
AARP Unitedhealthcare $0 $0 medical, $0 prescription drug deductible PCP: $0

Specialist: $30

100% out of network $ 2,500
Cigna Courage Medicare $0 $0 medical, $0 prescription drug deductible PCP: $0

Specialist: $40

100% out of network $ 6,700

How Do I Enroll in a Medicare Advantage Plan?

To join Medicare Advantage, you first need to be enrolled in Medicare Part A and Part B. After you join Medicare and enrolled in those coverage parts, you can enroll in an HMO plan during your Initial Enrollment Period (IEP) or during other times throughout the year:

  • 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 opportunity 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 (AEP): This period runs from October 15 through December 7.
  • Medicare Advantage Open Enrollment Period (OEP): Medicare beneficiaries who already enrolled in a Medicare Advantage Plan can switch plans between January 1 and March 31.

Use the Medicare Plan finder to research available HMO plans in your area. The tool will ask you to provide information such as your ZIP code to find plans near you. Advantage plans may differ in availability and cost based on where you live. 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 (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.

Should You Get a Medicare HMO Plan?

Each type of Medicare Advantage plan offers its own advantages and disadvantages. A Medicare health maintenance HMO plan makes the most sense for plan members who 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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Certified Senior Advisor (CSA)®

As a health care professional since 1987, Kelly Blackwell has walked alongside and cared for seniors as they journey through the season of their fourth quarter of life. Blackwell holds a Bachelor of Science in nursing from the University of Northern Colorado, a Master of Science in health care administration from Grand Canyon University, an interprofessional graduate certificate in palliative care from the University of Colorado Anschutz Medical Campus and holds a Certified Senior Advisor® credential from the Society of Certified Senior Advisors.

Blackwell contributes to the University of Colorado-Anschutz blog and has been published in “The Human Touch” distributed by the University of Colorado Center for Bioethics and Humanities. She cowrote “Dying Is” for Pathways Hospice.

A registered nurse, Blackwell understands health insurance choices influence quality of life and are driven by values, goals, and beliefs. She’s passionate about engaging with, educating, and empowering seniors as they navigate the health care system. She’s equipped to lend an experienced, compassionate voice to beneficiaries seeking information about Medicare Advantage Plans.

As a CSA®, Blackwell has access to valuable resources for Medicare beneficiaries. Her work as a bedside nurse and clinical manager has given her the opportunity to see how Medicare rules, regulations, and benefits work when patients need them. With a passion to learn and to make a difference in the lives of seniors, Blackwell supports seniors through Medicare and fourth-quarter life decisions.

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