Medicare Advantage plans usually offer an HMO or PPO network. Insurance companies utilize cost-saving features such as a network of providers and PCP referrals to stretch the purchasing power of each dollar.

What’s a Medicare Advantage HMO Plan?

An HMO uses a Health Maintenance Organization. With an HMO, the insured person must select a primary care doctor. The primary care doctor (PCP) will issue a referral when the patient’s needs require treatment from a specialist.

The insurance plan doesn’t cover services outside the network or services provided without a referral, except for preventive services, mammograms, and services related to emergency care.

HMO plans offer some of the lowest premiums but often get disregarded due to the restrictions. These types of plans may include a lower cost, limitations, or follow different rules.

Medicare Advantage HMO plans must provide at least the same compensation package as Original Medicare. All Advantage plans must offer the same rights, benefits, and protections as Original Medicare.

Advantage plans can be competitive by offering ancillary benefits such as vision, hearing, and dental services.

Who is eligible for Medicare Advantage HMO Plan?

If you live in the service area and have Medicare parts A and B, you can enroll in a Medicare Advantage plan. Medicare beneficiaries can enroll in a Medicare Advantage HMO during specific enrollment periods. What is the difference between an HMO and a PPO?

An HMO utilizes the PCP as the gatekeeper and requires any services outside an emergency must first be addressed with the PCP.

The primary doctor will determine if they can treat the patient. If a specialty provider or care outside of the scope of the PCP is necessary, the PCP will issue a referral to the patient.

Services received without a referral may not be covered under an HMO plan unless the care was due to a medical emergency.

A PPO (Preferred Provider Organization) utilizes a network of providers and pays a higher benefit when using network providers. Referrals aren’t required, and Medicare Advantage PPO plans tend to cost more than Medicare Advantage HMO plans.

The cost difference corresponds with the fact they pay a percentage of the benefit out of network.

Are Medicare Advantage HMOs Different than Original Medicare?

A Medicare Advantage HMO is a different option from the Original Medicare.

Original Medicare is used by any doctor or hospital that accepts Medicare. After your deductible, Original Medicare pays at 80% coinsurance for Part B services, leaving the Medicare beneficiary with an out-of-pocket responsibility of 20%.

With a Medicare Advantage HMO plan, most services have only a small co-pay or coinsurance assigned to the beneficiary.

Keeping your PCP involved in all aspects of patient care is the HMO way of maintaining healthy members.

Utilizing wellness checkups and PCP visits to address concerns before they become costly is one way HMOs stay ahead and minimize expenses.

Primary care doctors encourage patients to keep yearly visits to review pre-existing conditions and discuss new concerns.

What are the Drawbacks of an HMO?

The most significant drawbacks of a Medicare Advantage HMO plan are the referral requirement and network of providers.

If they leave the network, you’ll need to select a new doctor or practice. HMO plans only provide coverage for in-network doctors.

Referrals are the other deterrent for HMO plans. Beneficiaries are encouraged to discuss health concerns with their primary doctor.

Open communication with the doctor should help patients get referrals to specialists promptly.

If you keep your PCP in the loop and address concerns before they become issues, obtaining referrals for additional treatment isn’t holding up care.

HMO Common Characteristics

  • Low monthly premiums – HMO plans have little to no monthly premiums.
  • In-network benefits – HMO plans don’t pay benefits outside the network except in an emergency.
  • No health questions – There isn’t a requirement for health questions when enrolling in a Medicare HMO plan.
  • Referral required – from the PCP, except in an emergency.
  • Part D drug coverage – usually included in Medicare HMO plans.
  • Co-pays and coinsurance – usually, insured persons pay a small co-pay for covered services in place of the 20% typically assigned by Original Medicare.
  • Annual plan changes – Plan changes can be made by the insurance company every year.

How to Enroll in a Medicare Advantage HMO Plan

You can enroll in a Medicare Advantage HMO plan by working with a licensed agent. You can now complete our online rate comparison form to see rates in your zip code.

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Written By:
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Lindsay Malzone, Lindsay Malzone is the Medicare editor for She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.
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Rodolfo Marrero, Rodolfo Marrero is one of the co-founders at He has been helping consumers find the right coverage since the site was founded in 2013. Rodolfo is a licensed insurance agent that works hand-in-hand with the team to ensure the accuracy of the content.