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Medicare Advantage HMO Plans: What You Should Know

What’s an HMO Plan?Jump to
Pros of an HMO Plan?Jump to
Are there HMO plan restrictions?Jump to
What’s a Medicare Advantage HMO-POS Plan?Jump to
Other types of Medicare Advantage PlansJump to

What’s an HMO Plan?

Health Maintenance Organization (HMO) plans are one of the five types of Medicare Advantage Plans (Medicare Part C) available to Medicare enrollees. These plans provide health care coverage for your doctors, specialists, health care providers and hospitals within the plan’s network for certain services.

A network is a group of doctors, health care providers and hospitals that contract with a plan to provide services. Unlike Original Medicare (Medicare Part A and Part B) which allows you to see any doctor or specialist that accepts Medicare, Medicare Advantage HMOs encourage you to use in-network health care providers to save money because you may have to pay the full amount of the health service if you go out of network.1

Pros of an HMO Plan?

Each Medicare Advantage Plan type has its pros and cons. Here are some qualities that make HMO Plans an attractive option.


HMO Plans are the most common type of Medicare Advantage Plans available. In 2022, HMO Plans account for 59% of all plans.2 The second most available plan type is Local Preferred Provider Organization (PPO) Medicare Advantage Plans with 37% of all plans.


One of the most significant advantages to Medicare Advantage HMO plans is the plan’s simplicity. You only need to manage one HMO plan in most cases instead of juggling between multiple health plans. With Original Medicare, you could be required to manage four separate plans – Medicare Part A, Part B, Prescription Drug Plan and possibly Medigap.

Out-of-Pocket Costs

Medicare Advantage HMO Plans typically have out-of-pocket maximums, which put a cap on how much you must spend before the plan covers the rest of your health care costs for the rest of the year. Original Medicare doesn’t have an out-of-pocket maximum unless you have supplemental coverage like Medigap.

Prescription Drug Coverage

In most cases, prescription drug coverage is included in HMO Plans. However, there are some HMO Plans that don’t have drug coverage. Remember, you can’t add a separate Medicare Prescription Drug Plan (Medicare Part D) to an HMO plan.3

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Are there HMO Plan Restrictions?

A key differentiator for HMO Plans compared to other Medicare Advantage Plans is the plan’s restrictions. For some, these restrictions are not an issue, and for others, it may lead to considering a different type of plan.

Provider Networks

With an HMO plan, you will be required to use doctors, specialists and hospitals within your plan’s network. If you choose to go to a doctor or health care facility that isn’t in your plan’s network, you will be required to pay the full amount of the service with no reimbursement from insurance.

The only exceptions to seeing out-of-network health care providers are when it comes to:

  • Emergency care
  • Out-of-area urgent care
  • Out-of-area dialysis

Primary Care Providers and Referrals

With an HMO plan, in most cases, you will be required to have a primary care doctor that’s in your plan’s network or service area. If you need to see a specialist, you will need to get a referral from your primary care provider first.

However, some services like yearly screenings for mammograms don’t require a referral.

When an HMO Plan Would Not Be Best

That’s why she’s opting for a Medicare Advantage Preferred Provider Organization Plan instead of an HMO Plan.

What’s a Medicare Advantage HMO-POS Plan?

Some insurance companies offering HMO plans may also offer HMO Point-of-Service (HMO-POS) Plans. These plans are HMOs that allow you to get some services out-of-network for a high copayment or coinsurance.

If you’re interested in having more flexibility in which doctors you can use and don’t my potentially paying more for your services, then a Medicare Advantage HMO-POS Plan may be a good option for you.1  

Other types of Medicare Advantage Plans

Medicare Advantage comes in different plan types. There are five different Medicare Advantage Plan types available, including HMO plans. Those plans include:

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1 Private Fee-for-Service (PFFS) Plans, Pages 15-16, “Understanding Medicare Advantage Plans,” Centers for Medicare & Medicaid Services, Accessed: Feb. 15, 2022.
2Medicare Advantage 2022 Spotlight: First Look,” Kaiser Family Foundation, Accessed: Feb. 11, 2022.
“Health Maintenance Organization (HMO),”, Accessed: Feb. 11, 2022.

Denise Austin, 65, Ensurem Ambassador

Best-Selling Author, Creator of Fit Over 50 Magazine

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