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HMO (Health Maintenance Organization)
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Important Points
An HMO is a Medicare Advantage plan option.
Medicare HMO plans are more restrictive than other options.
HMO plans require you select a primary care doctor and have a network of providers specific to your plan.
Medicare HMO plans are a very popular plan option. Approximately 30% of Medicare beneficiaries are enrolled in some type of Medicare Advantage plan.
The reason that Medicare HMO plans are common is due to the lower premiums they often offer. A lot of these plans may be as low as $0. However, you still have to be enrolled in and paying for Medicare Part B in order to get the coverage. You also usually must receive your treatment with in-network providers except in the case of an emergency.
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What is an HMO?
Medicare HMOs, also known as health maintenance organizations, are an option through which Medicare beneficiaries can access their Medicare services. Often these are called Medicare-managed care plans because your care is managed through a network of doctors and hospitals specific to the HMO plan. The insurance carrier contracts with certain doctors and physicians in your local area to form a network. You will then select a primary care physician (PCP) who will coordinate your care.
If a health condition can not be treated by your primary care doctor, he or she will issue a referral for you to see a specialist in the network. Certain services like preventive care, mammograms, and emergency room visits may not require a referral. Additionally, some plans may not require referrals for specialty care. Be sure to check your Summary of Benefits for details on how your plan works.
A Medicare HMO plan does not replace Medicare Part B. You must first be enrolled in both Medicare Parts A & B before you can enroll in a Medicare HMO. You must also live in the plan's service area.
When you enroll in an HMO, you agree to obtain your care through the plan's network, except in cases of emergency. Some plans may have an HMO-Point of Service (POS) feature. An HMO-POS is a hybrid between HMO and PPO plans. In a POS plan, you can see providers outside the network for certain services and in certain situations, such as traveling. Plans can vary, so always confirm with your plan how their POS feature works.
If an HMO feels too restrictive to you, you can consider a Medicare PPO plan which has much more flexibility.
Common Features of HMO Plans
Annual Changes - The benefits, formulary, pharmacy network, provider network, premium and/or copayments/coinsurance may change on January 1st of each year. It is important to read the Annual Notice of Change letter when it is sent each September to make sure you understand the changes you plan may make for the coming year.
Local Network- Network of healthcare providers and hospitals from which you must get your care, except in emergencies. Many of these plans require that you choose a primary care doctor. That doctor will coordinate a referral to send you to a specialist if needed. Some companies offer HMO-POS plans. These plans may also have some out-of-network services at higher copays.
Lower Premiums- Premiums may be lower than Medigap plans in your area. In fact, many areas have plans with a $0 premium. However, premiums can change from year to year. It is important to review your Annual Notice of Change (ANOC) letter when they are sent out each September. This letter will outline all the upcoming changes to your Medicare HMO plan for the next year.
No Health Questions- These plans ask no health questions and do not have to be underwritten in order for you to qualify.
Pay As You Go- You pay for your healthcare services in the form of co-pays or coinsurance. Your plan's benefits summary will tell you how much the provider is allowed to charge for certain services. Co-pays vary for services such as doctor's visits, inpatient hospital care, lab work, and more.
Prescription Drug Plans- Many Medicare HMO plans include prescription drug coverage that satisfies your Part D requirement. You should always check the plan's formulary to ensure that your medications are included in the plan.
HMOs are typically the most restrictive type of Medicare Advantage plan. There are no out-of-network benefits except in cases of emergency (ER visit). All Medicare Advantage plans have certain limitations and restrictions which you must abide by.
If Most Plans Have a $0 Premium, How Do Medicare Advantage Companies Make Money?
Medicare Advantage plans are paid a "capitation fee" by Medicare to take on your medical risk. This is the reason why you must remain enrolled in both Medicare Part A & B while enrolled in a Medicare Advantage plan. The premium that you pay for Part B gets forwarded to the Medicare Advantage company to insure you. Since the Medicare Advantage carrier is getting paid by Medicare for your enrollment, they will typically offer you premiums as lows as possible, and sometimes even $0 premiums, to attract you to their plan.
When you have a Medicare Advantage plan, the Medicare program itself is not responsible for paying any of your services. Your providers must bill the Medicare Advantage company directly.
Which Companies Offer Medicare HMO Plans?
The availability of Medicare HMO plans vary by state and county. Dozens of well-known, national & regional insurance companies offer plans, such as Aetna, Anthem, Blue Cross Blue Shield, Cigna, Humana, United Healthcare, and many more. If you would like help you can call us at (866) 440-1885. We can check what plans are available in your county.
Which Medicare HMO Plan is Best?
We are often asked, which Medicare Advantage plan is the best? Well, the answer is that it depends! Choosing the best Medicare Advantage plan for you is very much an individual decision. One plan may be perfect for you but not great for your neighbor down the street because his/her doctor is not in the network. Another plan may have great prices for the medications that you take, but not even cover the medications that your neighbor takes. Checking that your doctors and prescriptions are in the network and covered under the plan is a crucial first step in deciding which plan will work best for you. You can always call us for a free consultation at (866) 440-1885. We will review your doctors and medications to help find a plan that fits your needs.
Another helpful guide in making your decision can be the star rating system. The Medicare program gives each Medicare Advantage plan a star rating that is based on feedback from current plan members. The highest rating is 5 starts, although it is not very common. Most plans will be rated 3 or 4 stars. If a plan has a rating lower than 3 stars, it must notify you and you will be allowed to change out of that plan mid-year. (It creates a "Special Enrollment Period" for you to switch plans).
More About HMO Plans
Reviewing HMO plans one-by-one can be a very tiring process. It is generally best to seek help from a licensed insurance agent that specializes in Medicare products. A good agent can provide a lot of useful information, such as the plan's network size and service area. We will go over the HMO plan's start rating and what that means and, most importantly, we will let you know whether your doctors participate in the plan.
Having an experience agent on your side can help you consider factors that are specific to you. For instance, we can review whether the plan has a built-in Part D prescription drug formulary that includes all of the medications that you take.
We would be happy to be your agent and walk you through the process. Contact us at (866) 440-1885 for help today!
Key Points
Many HMO plans include a built-in Part D prescription drug plan at no extra cost to you.
Many HMO plans have low or even $0 premiums.
HMO plans have no out-of-network benefits except in the case of an emergency.
Your plan benefits can change from year to year. Review your Annual Notice of Change (ANOC) letter each September.
At Mohring Insurance Services LLC, we are happy to offer assistance with Medicare when you choose to enroll. Give us a call at (866) 440-1885, or to schedule a free consultation, click the link below:
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