Some HMOs have contracts with Medicare to provide medical care to Medicare beneficiaries. HMOs that contract with Medicare must provide all the services that are covered under Medicare (except hospice service) and may offer additional services that Medicare does not cover. You must continue to pay your Medicare Part B premiums, even if you enroll in an HMO that provides all your medical services.

Medicare HMOs have annual enrollment periods. You can enroll during one of the enrollment periods regardless of your age or health status. This is an important difference between coverage through an HMO and coverage through a supplement policy (Medigap), which can deny coverage if you enroll after the 6-month Medigap enrollment period when you buy Part B coverage.

Most of the HMOs that contract with Medicare are called Medicare "risk" HMOs. When you enroll in a Medicare risk HMO, you assign your Medicare benefits to the HMO and agree to receive all your services from that HMO. You do not have to pay the Medicare deductibles and coinsurance. Using only HMO-specified providers is called the lock-in requirement. Services not provided by an HMO-affiliated provided are not covered, except for emergency care. Some risk HMOs offer a point of service (POS) option which allows members to use non-plan providers in certain cases. The member, however, must pay more of the cost under the POS option.

Some HMOs that contract with Medicare are called "cost" HMOs. Cost HMOs do not have lock-in requirements. You can go to one of the HMO providers or to a provider not in the HMO. If you go outside the HMO network, Medicare will pay its portion of the charges and the health plan will not pay for any of the charges. This means that you are responsible for Medicare's deductible and coinsurance.

When looking at HMOs it is important to understand the additional benefits available and what limits may apply, if any. It is also advisable to find out how the HMO operates and research which providers and hospitals will be available to you. For example, your existing doctor may not be in the HMO network, and many doctors who are in the network may not accept new patients. Since HMO networks are geographic, you may not be covered for medical care received if you are out of the area. Review the HMO's out-of-area coverage carefully.

Once you are enrolled in an HMO, you can disenroll at any time. You can be covered by Medicare alone (fee-for-service) or join another Medicare HMO. You do not have to provide evidence of good health to join a Medicare HMO. Health screenings or questions about your health are illegal. However, if you are applying for supplemental/Medigap insurance, coverage may be denied if you have a pre-existing health condition.