Medicare HMO Plan Explained

Medicare Advantage HMO plans generally require you to see a network provider, with a few exceptions. Here’s how they work.
Kate Ashford, CSA®
By Kate Ashford, CSA® 
Edited by Holly Carey Reviewed by Debra Nuckols

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A Medicare Advantage health maintenance organization, or HMO, plan is a health insurance plan that requires members to use providers and medical facilities in the HMO’s network for care — unless it’s an emergency. You may also be able to get out-of-network care if you need urgent care when you’re out of the plan’s service area or if you need out-of-area dialysis.

The Medicare HMO plan is the most common Medicare Advantage plan, accounting for almost 60% of all Medicare Advantage plans.

How Medicare Advantage HMO plans work

Medicare Advantage is a bundled alternative to Original Medicare and is sold by private health insurance companies contracted with the federal government. Medicare Advantage plans include all the benefits of Medicare Part A and Part B, usually prescription drug coverage (Part D), and often additional benefits like coverage for vision and hearing care.

A Medicare Advantage HMO plan generally requires that you use a specific network of doctors and hospitals.

The “network” is a list of medical providers and facilities that have contracted with the plan to provide services for specific prices. HMOs generally require members to choose a primary care physician and coordinate all care through that medical provider. This means members may need a referral to see a specialist.

What is a Medicare Advantage HMO-POS plan?

An HMO-POS is a health maintenance organization with a point-of-service option. With this kind of HMO, members may be able to seek care out-of-network, but it will cost more.

Advantages of a Medicare Advantage HMO plan

Lower costs

Medicare Advantage HMO plans have contracted with medical providers who will accept payment at certain rates for services, so they generally come with lower monthly premiums than other insurance plans. In addition, copays and coinsurance also tend to be lower.

Whole-patient care

HMOs organize member care through a primary care physician, so your primary doctor usually has a good sense of your overall medical picture, which can be helpful.

Disadvantages of a Medicare Advantage HMO plan

Limited options

Members of a Medicare Advantage HMO plan usually must use providers and facilities within the plan’s network— unless it’s a true emergency. This limits your options for seeking care. It also limits your options when traveling outside your plan’s service area.

Referrals required

HMOs require that members get referrals from their primary doctor to see a specialist. However, some people may not appreciate the extra step.

Who might benefit from a Medicare Advantage HMO plan

A Medicare Advantage HMO plan isn’t the best choice for everyone. But it’s something to consider if the following situations apply:

  • You can’t afford the higher monthly premiums of a different kind of health plan.

  • You’re generally healthy and don’t often seek medical care.

  • You don’t mind getting a referral to see a specialist.

To compare Medicare Advantage HMO plans (and other Medicare plans), visit Medicare’s plan finding tool.

If you have additional questions about Medicare, visit or call 800-MEDICARE (800-633-4227, TTY 877-486-2048).
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