Health Maintenance Organization (HMO) is a type of Medicare Advantage plan. These plans work by coordinating your healthcare to lower your out-of-pocket costs.
There are a lot of things you need to know about HMO plans when considering which Medicare plan is right for you. Let’s start by taking a look at the coverage they have to offer.
How HMO Coverage Works
HMO plans function on an established network of medical and healthcare providers. Because Advantage plans are privately owned, your location and the location of the plan will determine who and what is offered.
You are expected to receive all of your care through this network—venturing outside of it means much higher out-of-pocket costs.
Regardless of your location, all HMO plans must offer the same basic coverage included in Original Medicare. This includes the emergency and short-term healthcare coverage offered by Plan A, and the general medical and preventative care provided by Plan B.
As you already know, HMO plans reduce costs by providing coverage in a set network, making them one of the more affordable options on the market. The main features of this network include:
- Required Primary Care Physician
- Required Specialist Referrals
- Covered Emergency, Out-of-Network Urgent Care and Dialysis
- No Referrals Required for Services Such as Yearly Maintenance Check-Ups
- Prescription Drug Coverage (Included in Most Plans—If Not, You May Sign Up for an Additional Part D Plan)
The Cost of an HMO Plan
Because HMO plans are offered privately, the exact cost will vary. However, you can expect to make payments in 3 main areas:
Premiums: This is a relatively low monthly fee you must pay regardless of the benefits you take advantage of a particular month.
Deductibles: This is a yearly flat fee that must be paid before you can continue receiving coverage.
Coinsurance/Copayment: For each benefit you receive through the plan, you will have to pay a small contribution up to a certain limit. If this limit is met, your plan will cover 100% of the costs. Typically, this fee is either a flat or percentage rate.
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