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Medicare Advantage HMO Plans: How They Work

The most common Medicare Advantage plan type, and usually the cheapest. The trade is simple. You accept a network, and the plan rewards you with low costs.

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What an HMO is

HMO stands for Health Maintenance Organization. An HMO plan builds a network of doctors, hospitals and pharmacies in your area, and your care happens inside that network. Emergencies are covered anywhere, and so is urgent care when you are away from home and dialysis, but routine care outside the network generally is not covered at all.

The rules that come with it

Network
You use the plan's doctors and hospitals. Going outside the network for routine care usually means paying the full cost yourself.
Primary doctor
Most HMOs ask you to choose a primary care doctor who coordinates your care.
Referrals
Seeing a specialist usually requires a referral from that primary doctor first.
Drug coverage
Usually built in. If an HMO includes drug coverage, you must take it from the plan, not from a separate Part D plan.

What you get in return

Premiums are often low and frequently zero dollars. Copays are predictable, the plan has a yearly out of pocket maximum, and extras like dental, vision and hearing are often included. For people whose doctors are already in the network and whose care mostly happens near home, an HMO is often the best value in Medicare.

The one question that decides it: are your doctors in the network? We check that before anything else, because the best priced plan is worthless if it does not include the doctor you trust.

Who an HMO suits

An HMO fits people who want the lowest monthly cost, get their care close to home, and do not mind their care being coordinated through one primary doctor. If you travel for months at a time or insist on seeing any specialist directly, look at a PPO instead.

A Medicare member visiting a doctor in their HMO network
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