A Health Maintenance Organization (HMO) is an organization that offers health insurance coverage for a monthly or annual fee. It comprises a group of medical insurance providers who limit coverage to medical care provided by doctors and providers who are under contract with the HMO. HMO plans are one of the four Medicare Advantage plans, along with SNP, PPO, and PFFS plans. They are popular because they usually have low monthly premiums, even as low as $0 per month. However, this low cost comes with limitations on which providers and facilities members can receive care from.
- Emergency care
- Out-of-area urgent care
- Temporary out-of-area dialysis
Medicare Advantage Plans
Medicare Advantage Plans provide all of the benefits of Original Medicare, with the exception of clinical trials, hospice services, and some new benefits resulting from legislation or national coverage determinations. These plans typically do not cover medical care received outside of the United States, although some plans may offer a supplementary benefit that covers emergency or urgent services during travel outside of the country. Medicare Advantage plans offer numerous benefits, such as coverage for items that Original Medicare does not cover, including fitness programs. Additionally, some plans may include coverage for vision, hearing, and dental services, such as routine checkups and cleanings. If you have a specific medical condition, a Medicare Advantage plan may be able to customize its benefits to meet your unique needs.
Part C HMO Plans
The Health Maintenance Organization (HMO) is a prevalent type of Medicare Advantage plan that has its own network of healthcare providers and facilities. These providers have agreed to offer services to HMO members under the plan’s network.
To receive care under an HMO plan, policyholders must choose a primary care physician from the plan’s network. This doctor will coordinate all care for the member and refer them to specialist providers within the network when necessary.
If a member of an HMO plan receives care from an out-of-network provider or facility, the plan typically provides no coverage, and the member must pay 100% of the costs out-of-pocket. However, coverage for out-of-network services is available in emergency situations.
Despite the network restrictions, many Medicare beneficiaries opt for HMO plans because of their low premiums. Some HMO plans even have no premiums. However, Medicare Advantage plan members must still pay the Medicare Part B premium.
Since all Medicare Advantage plans are offered by private insurance companies, each plan’s features and benefits may differ. They may have varying coverage levels, copays, coinsurance costs, and networks. Most HMO Part C plans include prescription drug coverage, but their drug formularies may differ.
Medicare Advantage HMO Eligibility
If you have enrolled in Medicare Parts A and B, you are eligible to apply for a Medicare Advantage HMO plan, with the exception of individuals already diagnosed with End-Stage Renal Disease (ESRD). The enrollment can be done during your Initial Enrollment Period or Annual Enrollment Period, and some people may qualify for a Special Enrollment Period.
However, Medicare Advantage HMO plans are not available in all areas. It is recommended to consult a licensed agent to determine the plans available in your region.
Differences Between HMO and PPO Advantage Plans
Medicare Advantage plans are available in various types, but HMO and PPO plans are the most popular. SNPs are also an option, but only available for eligible individuals. PPO plans function similarly to HMO plans but with a few key differences. Unlike HMO plans, PPO plan members can still receive benefits if they seek out-of-network care, but they will pay a higher out-of-pocket cost. However, it is still recommended to stay within the plan’s network to avoid additional costs. In contrast to HMOs, PPO plans generally don’t require primary care physician designations, and specialists don’t require referrals. Higher benefits typically mean higher premiums, so PPO plans will have higher monthly premiums than HMO plans. Nevertheless, both HMO and PPO plans are great options that can help reduce out-of-pocket expenses.
Comparing Medicare HMO Plans to Original Medicare
Medicare Advantage plans are a different option than Original Medicare, offering at least the same level of benefits but with significant differences. One significant difference is that Original Medicare does not restrict beneficiaries to a specific network of providers. Beneficiaries can choose any provider who accepts Medicare assignment and receive full coverage. However, if a provider doesn’t accept Medicare assignment, the individual may have to pay excess charges. Conversely, HMO plans in Medicare Advantage do not offer any coverage outside of the plan’s network.
Unlike those enrolled in Original Medicare, Medicare Advantage plan members cannot purchase Medigap (Medicare supplement) plans. Lower monthly premiums are generally associated with Medicare Advantage HMO plans compared to Original Medicare.
Another difference is that Original Medicare does not cover prescription drugs, and individuals must purchase a stand-alone Part D plan. However, most Medicare Advantage HMO plans include prescription drug coverage.
Learn More About Medicare Advantage HMO Plans
When it comes to choosing a Medicare Advantage plan, it’s crucial to weigh all your options. If you’re considering an HMO plan, take the time to research which of your current healthcare providers will still be available to you and whether you’ll need to find new ones or a new medical facility. Additionally, consider your travel habits since there is typically no coverage outside of the plan’s service area.
Selecting the right Medicare Advantage plan can be a complex decision. Our expert agents can assist you in finding the plan that meets both your medical and financial requirements.
Medicare Advantage HMO Disadvantages
The primary drawback of HMO plans is the restricted provider network, which limits the choices of doctors available to plan members. In the event that a member’s current doctor leaves the network, they will need to find a new provider. This also applies to entire healthcare facilities.
In order to see a specialist, HMO plan members are required to obtain a referral from their primary care physician. This means that two separate copays will be required for two separate visits.