HMO Plans

Health Maintenance Organization (HMO) plans are a type of health insurance plan that works with a network of contracted healthcare providers to keep your costs low. This is an affordable option for people who do not have many healthcare needs and require mainly basic preventive care and regular checkups.

HMOs with a point-of-service option allow you to go outside of the plan’s network for certain services.

What is an HMO?

Health Maintenance Organization (HMO) plans are a type of Medicare Advantage plan designed to help people keep healthcare costs low. As a Medicare Advantage plan, they offer the same hospital and medical insurance as Original Medicare does under Part A and Part B. These plans can have additional benefits such as prescription drug coverage with optional added packages for dental, vision, or hearing care.

What is an HMO?

HMOs have networks of doctors, hospitals, and other healthcare providers. You are required to have a primary care physician, who must be within the plan’s network. This is one drawback of HMOs. You are only covered for care received from healthcare providers within the plan’s network, except in emergencies or for out-of-area urgent care or dialysis. Your plan will notify you if your doctor no longer works with the plan.

You may need prior approval before getting certain services and you must get a referral from your primary care physician to see a specialist, except for certain preventive services. Some yearly preventive care, such as screening mammograms, does not require a referral.

You will always be able to receive care in an emergency, even if you must receive that care outside of your plan’s network. You can also receive out-of-area dialysis and out-of-area urgent care. 

You may have to pay the full cost for services received outside of the plan’s network. If you have an HMO with a point-of-service option, you may be covered for certain services received outside of your network. Generally though, all care is received from within the network.

Costs Under an HMO

Health Maintenance Organization plans are intended to be affordable options. Compared to most Medicare Advantage plans, HMOs are a low-cost health insurance choice. Having a primary care physician helps you to determine whether services are medically necessary, which can save you money. Receiving your care from the contracted providers within the plan’s network also saves you money thanks to the negotiated lower costs for plan members. 

Under an HMO, you can expect to pay relatively low monthly premiums. If you choose to add additional benefits for dental, vision, hearing, or other care, you can expect to pay slightly more in premiums. You must also continue to pay your monthly premiums for Part A and Part B.

Out-of-pocket costs under an HMO include copayments, deductibles, and coinsurance.

Benefits of an HMO

The main benefit of having an HMO plan is the cost savings. This comes in the form of lower premiums and reduced out-of-pocket expenses from seeing providers within the network.