HMO Pros and Cons

HMO Plans are not for everyone. An HMO is often the cheap alternative to Original Medicare but that cost savings come from somewhere. Here is a quick breakdown of Medicare HMO Plan Pros and Cons

HMO Pros

  • Usually cheaper than the same coverage using Original Medicare.
  • Privately run companies.
  • Billing is often more streamlined and easier to understand.
  • Many plans to choose from so you can get the best plan for your needs.
  • Often includes some coverage not covered under Original Medicare. Things like dental and vision care are often offered by HMO Plans but are not covered under Original Medicare.
  • Includes an agent who can explain changes in rules and plan alternatives.
  • Uses a network where most providers know each other. This makes it easier to coordinate care, keeps expenses low and prevents unnecessary treatment.
  • Primary care physician who will get to know your case file and who can help you with specialists.
  • Appeals process includes an additional level of appeals.

HMO Cons

  • HMO Medicare Plans are usually location specific. This means that if you need to see a provider out of the network and it isn't an emergency the plan will likely only cover a small portion of the bill. This can be very difficult for an older people who have seen a particular specialist for years and they have no desire to change. If the specialist isn't included within the provider network the patient must either pay more out of pocket or use a different provider. This is also a huge disadvantage for seniors that spend part of the year in a different location. If you are out of the network everything from your doctor's bills, to your eye checkup, to your prescription refill may not be covered. This is a serious disadvantage and something to think about because almost any provider can be used with Original Medicare.
  • To see a specialist you will need to first get a referral from your primary care physician. For many seniors, and especially for those with mobility issues this is a huge inconvenience.
  • A Medicare HMO can't be used with Supplemental Insurance. Supplemental Insurance from a previous employer or another insurance company cannot be used with a Medicare HMO Plan. For patients with very serious medical problems supplemental insurance can be a huge help. It generally pays all of the patient's costs of care. Supplemental insurance also extends hospitalization coverage and can include extras like travel insurance.
  • Use of Network providers is needed to keep out-of-pocket expenses low.