What is an HMO Plan in Medicare Advantage?
When you had traditional insurance—either private or employer-provided—you probably had one of two main types of coverage: a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO). But what do these two terms mean when it comes to access to medical care?
How does HMO compare to PPO insurance?
An HMO provides members access to a more restricted network of healthcare providers, and members must stay within that network in order for claims to be covered. Generally, you are required to choose a primary care physician (PCP), and then that doctor will provide referrals if you need to see a specialist.
On the other hand, with PPOs, the insured has access to healthcare providers within and outside of their plan’s network, which means they have a wider variety of choices when it comes to doctors, specialists and hospitals.
At a glance: HMO insurance
Understanding Medicare HMO Plans
When it comes to Medicare Advantage, also known as Medicare Part C, the rules of a Medicare HMO are surprisingly similar to traditional insurance:
- Lower costs. If you’re budget-conscious, Medicare HMO plans tend to be less expensive than PPO plans. This cost savings—a result of more tightly managed care within a trusted network of providers—applies to premiums, deductibles, and copays. As a reminder, this price break applies only if you stay within this network—any services outside of the network will be subject to higher costs.
- Specific Network. HMOs are able to offer lower premiums because they maintain a network of contracted doctors, clinics, and hospitals that will provide healthcare to their members. When comparing plans, check the provider network of each before enrolling to ensure it will meet your needs. For instance, your current doctors may not be in network, which would mean switching to a new doctor.
- Primary care physician. One of the benefits of a Medicare HMO is a more coordinated approach to your care, across all of your medical needs. Once you choose a primary care physician, they’ll guide your medical care, whether that’s regular checkups or specialist referrals. This comprehensive approach ensures a higher quality of care, because all of your physicians are on the same page, and greater efficiency, because everyone is working seamlessly together.
- Specialist referrals. Your primary care physician will assess your condition or specific medical needs and, if necessary, provide a referral to an in-network specialist. Choosing to see a specialist without a referral may result in your claim being denied or you having to pay out-of-pocket costs.
- Prescription drugs. Unlike Original Medicare, where you must purchase a Part D plan in order to have prescription drugs covered, many Medicare Advantage HMO plans include prescription drug coverage. Since this isn’t true across the board, check for this coverage option with each plan you consider.
- Additional benefits. Some Medicare HMO Plans offer extra benefits, including dental, vision, and hearing care, and even fitness programs designed to promote an active lifestyle.
3 Frequently Asked Questions
It’s understandable that you may still have questions about the plan specifics when it comes to Medicare Advantage HMO plans. Let’s examine a few of the most common ones:
- What if I need emergency or urgent care? If your life is in danger or your health would be compromised without receiving immediate care, you will not be restricted to your network. Many times, for instance, ambulances are not within network. The same may be true for the nearest hospital. Therefore, you can visit any emergency room and still receive your in-network coverage. If you need urgent care and you’re not within your plan’s service area (e.g., you’ve traveled to another domestic location), you’ll be covered when seeing any provider. The only caveat is that you may need to submit your own claim to the insurance company.
- What if I’m out of the country? On any insurance plan, you typically won’t have coverage when traveling outside of the United States. However, some Medicare HMO plans offer an added benefit for emergency care anywhere in the world. Again, you will need to submit your own claim and await reimbursement from your insurance carrier.
- What if my doctor leaves the plan’s network? Your plan will alert you if one of your doctors or specialists leaves the network, and you’ll have the opportunity to choose a new provider.
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How to enroll in Medicare Advantage HMO plans
Medicare provides health insurance to people who are 65 years of age or older and younger people who suffer from a disability or end-stage renal disease (ESRD). Most people will enroll in Medicare during the seven-month Initial Enrollment Period (IEP), beginning three months prior to their 65th birthday.
Once you are enrolled in Part A (hospital and nursing care) and Part B (medical care), you may sign up for an Advantage plan during the Initial Coverage Election Period—which is typically the same as your IEP. An Advantage Plan is considered Part C because it’s a private plan that combines the benefits of both Part A and Part B.
Alternatively, there are several opportunities to enroll:
- The Open Enrollment Period, which takes place October 15 through December 7.
- Special Enrollment Period, which allows you to change plans at other times of the year if you have a qualifying event.
- The new Medicare Advantage Open Enrollment Period, which runs from January 1 through March 31. If you have already enrolled in a Medicare Advantage plan and want to switch Medicare Advantage plans, you may do so during this period.
The bottom line
If you’re seeking a less expensive Medicare plan, a coordinated-care approach to your medical needs, and prescription drug coverage, Medicare HMO plans may be the solution for you.
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