What You Should Know
- HMO Plans can provide comprehensive coverage for everything from doctor’s visits, preventive care, and lab services to hospital stays and nursing facility care.
- After joining, if you decide this plan isn’t the best option for your circumstances, you must wait until an applicable annual enrollment period to transfer back to Original Medicare or another approved Medicare plan.
- With a Medicare HMO Plan, private insurance companies manage your healthcare services through a select approved group of healthcare providers and medical facilities.
- The criteria to qualify for Medicare HMO plans aren’t strict. Enrollment in Original Medicare Parts A and B is necessary.
Medicare Health Maintenance Organization (HMO) plans offer Medicare benefits through private insurers to people enrolled in Medicare Parts A and B. The participating health insurance companies bill the federal government under Medicare for the coverage they provide. Your Part B Medicare premiums are part of the fixed payments that the government makes to these companies for your health insurance.
HMO Plans can provide comprehensive coverage for everything from doctor’s visits, preventive care, and lab services to hospital stays and nursing facility care. Plus, some plans offer optional services, like drug and dental coverage. However, costs, eligibility, coverage restrictions, and enrollment requirements should be reviewed to determine whether a Medicare HMO plan meets your needs.
After joining, if you decide this plan isn’t the best option for your circumstances, you must wait until an applicable annual enrollment period to transfer to another approved Medicare plan. So, review the following pertinent information about HMO plans carefully to better understand if this coverage will work for you.
What is a Medicare HMO Plan?
A Medicare HMO plan is one of the four available Medicare Advantage plans. These plans are also referred to as Medicare Part C, which includes coverage for Parts A and B, called Original Medicare. Some Medicare HMO plans also provide Part D prescription drug coverage.
With a Medicare HMO Plan, private insurance companies manage your healthcare services through a select approved group of healthcare providers and medical facilities. This is called in-network care. You may be able to receive covered out-of-network services in the following circumstances:
- Your Medicare HMO plan has a Point-of-Service (POS) option.
- Emergency care is required.
- You need out-of-area urgent care.
- You need your dialysis treatment while out of the area.
- Your in-network doctor refers you to an out-of-network specialist.
Advantages of a Medicare HMO Plan
These plans are extremely popular among Medicare recipients. Here are some reasons why:
- They have low monthly premiums, sometimes even $0.
- Most people are eligible — only those with end-stage renal failure are disallowed.
- Many options include a drug coverage Medicare Part D option.
- The co-payment setup may be more affordable.
- No claim forms are necessary to get medical treatment — an insurance card confirms eligibility.
- Some Medicare HMO plans offer more coverage at a lower cost than Original Medicare.
- The out-of-pocket maximums limit potential medical expenses.
- Some plans include select dental, hearing, and vision coverage.
Disadvantages of a Medicare HMO Plan
When choosing Medicare coverage, consider out-of-network costs, in-network doctor availability, and other restrictions. Here are some of the disadvantages of Medicare HMO plans:
- You typically only have a small local or regional network of providers that can provide covered care.
- Most out-of-network care expenses are not covered, further restricting the care you can receive.
- Even with an HMO-POS option, you are likely to pay more for out-of-network care.
- You must choose a primary care provider (PCP) who oversees most of your medical care.
- Your PCP acts as a “gatekeeper” to any specialized care, as Medicare HMO plans require PCP referrals to see specialists and other medical providers.
- Benefits, premiums, network participants, copays, and other coverage features often change year to year.
- If your PCP leaves the network, you must choose a replacement, which can disrupt your care plan.
- Medicare HMO plans are not available in every location.
- Due to rationing, it may not be possible to receive high-cost drugs, even when your plan includes Part D coverage.
Who is eligible for a Medicare HMO Plan?
The criteria to qualify for Medicare HMO plans aren’t very strict. Enrollment in Original Medicare Parts A and B is necessary. Most U.S. citizens and permanent residents aged 65 and older who’ve paid Medicare taxes for at least 10 years can meet this standard.
Location plays a role, as well. Enrollees must live in an area serviced by state-licensed and Medicare-approved HMO plan providers for no less than six months out of the year. You can search for an available plan in your area on the Medicare website.
People with end-stage renal disease may not join an HMO plan. An exception applies if you develop ESRD after you have already joined. You may also meet the criteria if you have been receiving healthcare coverage from the same insurer that offers the Medicare HMO plan in your service area prior to qualifying for Medicare.
How much does a Medicare HMO Plan cost?
Because you must be enrolled in Medicare Parts A and B to join an HMO plan, you’re likely to have a Part B premium payment each month. The typical monthly premium is $144.60, although higher earners pay more. Note that Part A is usually premium-free, as long as you paid sufficient Medicare taxes prior to enrolling.
Private insurers offering HMO plans may also charge a monthly premium. But the average premium amount for these plans is often quite low. In 2019, the average cost for Medicare Advantage plans was only $29. HMO plan premiums are usually lower, and in many cases, there is no premium. Plus, some insurers cover their plan members’ Part B premiums.
The range in monthly premium charges for HMO plans is between $0 and $173, on average. But to understand the true cost of an HMO plan, you must also consider additional ongoing expenses, such as copays and deductibles.
- Copays are dollar amounts you may need to pay when you visit the doctor or receive other medical services. The insurer sets this amount.
- Coinsurance is similar to copays, but the amount is normally a percentage of the Medicare-approved service charge. It doesn’t kick in until you have exhausted your deductible for the year.
- Deductibles are annual out-of-pocket amounts that you are required to pay before your insurance begins to pay for services.
- Out-of-network charges may apply if you seek care from a medical provider outside your plan network.
- Plans with additional services, such as Part D prescription drug, vision, dental, and hearing coverage, may charge higher premiums and a separate drug deductible.
Fortunately, these out-of-pocket expenses are subject to a yearly maximum. As of 2020, that amount was $6,700, although some insurers set a lower limit. Some Medicare HMO plans have no deductibles at all.
These costs vary from state to state, so it’s important to compare the plans available in your area for an accurate cost estimate.
How do I enroll in a Medicare HMO Plan?
The government’s Medicare Plan finder makes this process simple. Use this online tool 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.
If online enrollment isn’t available, contact the insurance company by phone or email to request a paper enrollment form. Complete the form you receive and return it to the insurer to join. You can also enroll by calling Medicare at 1-800-633-4227.
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 are already enrolled in a Medicare Advantage plan can switch plans between January 1st and March 31st.
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?
People in relatively good health who travel very infrequently and have no current need for specialty care may benefit from an affordable Medicare HMO plan. With that said, you should only join a Medicare HMO plan that you have thoroughly researched.
Look for any stated premiums and deductibles to assess affordability. Be sure that the out-of-pocket maximum isn’t beyond your means. If you choose a plan with Part D coverage, ensure that your medications are listed in the drug formulary. Other things to consider are the size of the network, the PCP choices and availability, and whether preferred doctors and in-network healthcare facilities are close enough to access without hardship.
Source: https://www.medicareadvantageplans.org/medicare-advantage-hmo-plans/