Medicare · Cornerstone
Medicare HMO plans: how they work and what they cost in 2026
Last reviewed August 17, 20269 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team
When you join a Medicare HMO, you select a primary care physician (PCP) from the plan's provider directory. That physician becomes your care coordinator. When you need to see a cardiologist, orthopedic surgeon, or any other specialist, your PCP generates a referral to an in-network provider. Without that referral, the plan generally will not cover the specialist visit.
1How a Medicare HMO works
The network boundary is firm. Seeing an out-of-network provider for routine care is typically your full financial responsibility unless the plan includes a point-of-service (POS) option, sometimes called an HMO-POS, which adds limited out-of-network access at higher cost sharing. If the plan you are comparing carries that label, look carefully at what the out-of-network cost sharing actually is, because it can differ substantially from in-network rates.
Emergency care is always covered anywhere in the United States regardless of network. Urgently needed care while you are temporarily outside the plan's service area is also covered. Neither of those situations requires prior authorization.
Because the insurer controls both the cost and the coordination of care within the network, HMOs tend to keep premiums and per-visit copays lower than other Medicare Advantage plan types. The tradeoff is that flexibility to choose any licensed provider is limited.
In short: An HMO channels all routine care through a chosen PCP and a defined provider directory, keeping costs lower in exchange for network restrictions.
2What a Medicare HMO costs in 2026
Cost in a Medicare HMO operates in layers. The first layer is the Part B premium, which does not disappear when you join an Advantage plan. In 2026, the standard Part B premium is $202.90 per month; you continue paying it directly to Medicare. The plan itself may charge an additional monthly premium or it may charge $0. Zero-premium HMO options are common but market-dependent; whether one is available depends on your county.
The most important protection against large bills is the maximum out-of-pocket limit, commonly called the MOOP. In 2026, CMS sets the federal in-network MOOP cap for Medicare Advantage at $9,250. Plans may set a lower limit, and many do. According to KFF, the 2026 enrollment-weighted average in-network MOOP across Medicare Advantage plans is $5,421. Once your in-network cost sharing for the year reaches your plan's MOOP, the plan covers 100 percent of covered in-network costs for the remainder of the calendar year.
If your HMO includes Part D prescription drug coverage, the 2026 out-of-pocket cap on covered drugs is $2,100 for the year, a change enacted under the Inflation Reduction Act. After that cap is reached, covered drug costs drop to $0 for the rest of the year. No Part D plan may set an annual deductible above $615 in 2026; many HMO-embedded drug plans set a lower deductible or none at all.
Copays and coinsurance for individual services, such as a primary care visit, specialist visit, or urgent care stop, are set at the plan level and vary. To find out more about coverage and what a specific plan charges per service, please contact us to discuss plan options.
If your modified adjusted gross income (MAGI) was above $109,000 as a single filer or $218,000 as a joint filer in 2024, you may pay an IRMAA (Income-Related Monthly Adjustment Amount) surcharge on top of the standard Part B premium in 2026, because Medicare uses a two-year lookback. A parallel IRMAA surcharge applies to your Part D costs as well. If your income has dropped since the year Medicare is using, you can request reconsideration of the IRMAA determination within 60 days of receiving the notice.
In short: The standard Part B premium of $202.90 per month in 2026 continues regardless of which HMO you join; the federal in-network MOOP cap of $9,250 sets a ceiling on your annual in-network spending.
3Prior authorization in Medicare HMOs
Medicare HMOs may require prior authorization (PA) before approving certain procedures, imaging studies, inpatient stays, and post-acute care services. Under CMS rule CMS-0057-F, with a compliance date of January 1, 2026, prior authorization timelines tightened across all Medicare Advantage plans.
For a standard prior authorization request, the plan must issue a decision within 7 calendar days. For an expedited request, when waiting for a standard decision could seriously jeopardize your health or your ability to regain maximum function, the plan must respond within 72 hours. Any denial must include a specific clinical reason based on current clinical criteria, not a blanket administrative rationale.
If the plan denies a requested service, you have the right to appeal. The first level goes back to the plan itself. If the plan upholds the denial, you can escalate to an independent review organization. For situations where services are being reduced or stopped, a fast appeal right also applies, and you can continue receiving care during the appeal process in many circumstances.
In short: Since January 2026, your HMO must respond to a standard prior authorization request within 7 calendar days and to an expedited request within 72 hours, with a specific reason required for any denial.
4Medicare HMO vs. PPO: the key structural difference
The other common Medicare Advantage plan type is the PPO (Preferred Provider Organization). The single most important distinction is network flexibility. A PPO maintains both an in-network tier and an out-of-network tier. You pay less when you use in-network providers and more when you go out of network, but the plan still shares some of the cost on the out-of-network side.
An HMO provides no out-of-network benefit for routine care, absent a POS rider. In exchange, HMOs typically feature lower or no plan premiums, lower copays for in-network visits, and often a tighter MOOP. A PPO trades some of that cost efficiency for provider flexibility.
For people who have established relationships with specialists who do not participate in any local HMO network, or who spend extended time in multiple states, a PPO or Original Medicare paired with a Medigap supplement may provide better continuity. For people whose preferred doctors are already in a local network and who want predictable, low per-visit costs, an HMO provides that structure without the added premium that often comes with a PPO.
In short: HMOs typically cost less and require in-network care; PPOs cost more but allow out-of-network access, making the choice a tradeoff between cost and flexibility.
5Extra benefits and coverage beyond Original Medicare
Most Medicare HMOs include benefits that Original Medicare does not cover. Routine dental care, vision exams and eyewear, hearing assessments and aids, and fitness program access appear in many plans. The scope and dollar value of these benefits are set at the plan level, vary widely, and are not standardized across carriers. Because plan-level benefit amounts are updated from CMS data on a rolling basis, specific figures do not appear here; they render from current plan data when you compare plans in your service area.
Fitness access programs vary by plan. Whether a specific gym network is available depends on the plan operating in your county.
One separately administered benefit worth knowing: since January 2023, Medicare beneficiaries may see an audiologist for certain non-acute hearing assessments without a physician order, once every 12 months. This applies to the diagnostic evaluation only, not to hearing aids. Hearing aids remain outside Original Medicare coverage regardless of how the evaluation is obtained.
In short: Extra benefits in a Medicare HMO are real but plan-specific; review the Summary of Benefits for a plan in your area, or contact us to understand what a particular plan includes.
6Enrollment windows for Medicare HMOs
Which enrollment window applies to you depends on your situation at the time you want to make a change.
Initial enrollment period (IEP). If you are approaching age 65, you have a 7-month window: the 3 months before your birthday month, your birthday month, and the 3 months after. Enrolling in Part B during this window avoids the Part B late-enrollment penalty, which adds 10 percent to your Part B premium for each full 12-month period you delayed without qualifying coverage, and the penalty is permanent.
Annual enrollment period (AEP). Every year, October 15 to December 7, anyone with Medicare can join, switch, or drop a Medicare Advantage or Part D plan. Changes take effect January 1 of the following year. This is the primary window most people use to select or change an HMO.
Medicare Advantage open enrollment period (OEP). January 1 to March 31, people who are already enrolled in a Medicare Advantage plan can switch to a different Advantage plan or return to Original Medicare. This window does not allow someone currently in Original Medicare to join an Advantage plan for the first time.
Special enrollment periods (SEPs). Certain life events open an SEP: losing employer coverage, moving outside a plan's service area, gaining eligibility for a low-income subsidy program called Extra Help (also known as the Low Income Subsidy or LIS), or being involuntarily disenrolled when a plan exits your market. The length and rules of each SEP differ by the qualifying event.
A critical point about leaving employer coverage: COBRA continuation coverage and retiree coverage do not count as active employer coverage for Part B SEP or late-penalty purposes. If you rely on COBRA after leaving a job and delay enrolling in Part B, the 8-month Part B SEP begins when employment or employer coverage ends, whichever comes first, not when COBRA runs out.
In short: AEP (October 15 to December 7) is the primary window for most people; the MA OEP (January 1 to March 31) allows one mid-year switch for current Advantage enrollees; SEPs cover qualifying life events.
7Is a Medicare HMO a good fit?
A Medicare HMO tends to work well when your preferred primary care physician, specialists, and hospital are already in the plan's network, when you live in one geographic area for most of the year, and when having a predictable, low cost per visit matters more to you than unrestricted provider choice.
It tends to be a harder fit if you have ongoing care from a specialist who does not participate in any local HMO network, if you split time between two states for long stretches and need non-emergency coverage in both, or if you prefer to self-refer to any licensed provider without needing a PCP referral each time.
Before you enroll, verify that your specific doctors accept the plan you are considering. Provider directories can contain outdated information, and participation can change during the plan year. Calling both the plan's member services and the provider's office directly is a practical step before committing to a plan.
To find out more about coverage and which HMO plans operate in your county, please contact us to discuss plan options.
In short: An HMO rewards those who value coordinated, low-cost in-network care; if multi-state coverage or provider flexibility is a priority, comparing PPO and Original Medicare options alongside any HMO is worth the extra time.
Common questions about Medicare
Quick answers to common questions
Tap any question to expand. Each question links to a fuller standalone answer.
Does Medicare pay for hearing aids
Original Medicare does not cover hearing aids or fittings.
Some Medicare Advantage plans may include a hearing benefit, but what they cover varies by plan.
Does Medicare cover ambulance services?
Yes, in limited situations.
Medicare Part B covers emergency ambulance transportation when traveling any other way could endanger your health, taking you to the nearest appropriate hospital or facility. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Air ambulance is covered only when ground transport cannot reach you or would take too long. Non-emergency ambulance trips, for example to dialysis, are covered only when a doctor provides a written order stating they are medically necessary. Medicare does not cover ambulance rides taken purely for convenience.
Does Medicare cover skilled nursing facility care?
Yes, on a short-term basis.
Medicare Part A covers skilled nursing facility (SNF) care after a qualifying inpatient hospital stay of at least 3 days, when you need daily skilled care like nursing or therapy. In 2026 you pay $0 for days 1 through 20 of each benefit period, $217 per day for days 21 through 100, and all costs after day 100. Coverage is for skilled care while you recover, not for long-term or custodial care (help with daily activities like bathing or dressing), which Medicare does not cover. Long-term nursing home care is generally paid through Medicaid or private funds.
Does Medicare cover physical therapy?
Yes.
Medicare Part B covers outpatient physical therapy that is medically necessary to treat your condition. You pay 20% of the Medicare-approved amount after the yearly Part B deductible ($283 in 2026). There is no longer a hard dollar cap on therapy, but once your physical and speech therapy together pass $2,480 in 2026, your therapist must add a note (called a KX modifier) confirming you still need care. Claims above $3,000 may be reviewed for medical necessity. Part A covers physical therapy you receive as a hospital inpatient or in a skilled nursing facility. A doctor or therapist must set up and regularly review your plan of care.
Does Medicare cover mental health services?
Yes.
Medicare covers mental health care across its parts in 2026. Part B covers outpatient services like therapy, counseling, and visits with psychiatrists, psychologists, and clinical social workers, and since 2024 it also covers marriage and family therapists and mental health counselors. You pay 20% of the Medicare-approved amount after the $283 deductible, and one depression screening each year is free. Part A covers inpatient mental health care, with a lifetime limit of 190 days in a freestanding psychiatric hospital. Part D covers most mental health medications. Many of these services are also available by telehealth, and Medicare Advantage plans cover at least the same benefits.
Does Medicare cover chiropractic care?
Partly.
Medicare Part B covers one specific chiropractic service: manual manipulation of the spine to correct a subluxation (when one or more bones of the spine are out of position) that a doctor confirms is medically necessary. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026. Medicare does not cover other services a chiropractor might offer, such as X-rays, massage therapy, acupuncture, or routine wellness visits, so you would pay the full cost for those. Some Medicare Advantage plans include extra chiropractic or wellness benefits beyond this.
Does Medicare cover home health care?
Yes, when you qualify.
Medicare Parts A and B cover home health care if a doctor certifies that you are homebound (leaving home takes a major effort) and need part-time skilled care, such as skilled nursing, physical therapy, occupational therapy, or speech therapy. A Medicare-certified home health agency must provide the care under a plan your doctor reviews. You pay $0 for covered home health visits in 2026, and 20% for any durable medical equipment. Medicare does not cover 24-hour home care, meal delivery, or homemaker services like cleaning when that is the only care you need.
Does Medicare cover vision care?
Mostly no for routine care.
In 2026, Original Medicare does not cover routine eye exams for glasses or contact lenses, and it does not pay for the glasses or contacts themselves. It does cover some medical eye care: yearly glaucoma screenings for people at high risk, diabetic retinopathy exams, treatment for eye diseases, and cataract surgery (including one pair of standard glasses or contacts afterward). For those covered services you pay 20% after the $283 Part B deductible. Many Medicare Advantage plans add a routine vision benefit covering eye exams and an allowance for glasses.
Does Medicare cover hearing aids?
Original Medicare does not cover hearing aids or the exams used to fit them.
Some Medicare Advantage plans include a hearing benefit, but coverage varies by plan.
Does Medicare cover diabetes supplies and testing?
Yes.
In 2026 Medicare covers most diabetes care across two parts. Part B (outpatient care and equipment) covers blood sugar monitors, test strips, lancets, and continuous glucose monitors (CGMs) as durable medical equipment, plus diabetes screenings and a self-management training program. You pay 20% of the Medicare-approved amount after the $283 Part B deductible. Part D (drug coverage) covers insulin and related supplies like syringes, and in 2026 your insulin is capped at $35 for a month's supply. If you have a Medicare Advantage plan, it covers at least the same diabetes benefits, sometimes with added extras.
Does Medicare cover durable medical equipment?
Yes.
Medicare Part B covers durable medical equipment (DME): reusable medical gear your doctor prescribes for use at home, such as wheelchairs, walkers, hospital beds, oxygen equipment, CPAP machines, and blood sugar monitors. You pay 20% of the Medicare-approved amount after the $283 Part B deductible in 2026, and Medicare pays the other 80%. To be covered, the item must be ordered by a Medicare-enrolled doctor and supplied by a Medicare-enrolled supplier, and some items are rented rather than bought. Equipment meant mainly for use outside the home, or only for comfort or convenience, is not covered.
Which is better, Medigap or Medicare Advantage?
Neither is better for everyone; they suit different needs.
Medigap (also called Medicare Supplement, a private policy that pairs with Original Medicare) lets you see any doctor nationwide who accepts Medicare with no network and very predictable out-of-pocket costs, but you pay a monthly Medigap premium and add a separate Part D drug plan. Medicare Advantage (Part C, your Medicare benefits through a private plan) often has a lower or $0 plan premium, bundles drug coverage and extras like dental and vision, and caps your yearly out-of-pocket costs, but uses provider networks and may require prior approval. People who travel, want maximum doctor freedom, and prefer steady costs often lean Medigap; people who want low premiums, extras, and a network they are comfortable with often lean Medicare Advantage. With both, you still pay the Part B premium ($202.90 per month in 2026). To find out which fits your situation, reach out to a licensed Goodsurance advisor at 1-888-301-8091 (TTY 711), Mon to Fri 8 am to 5 pm PT.