HMO Insurance Explanation

In the world of health care plans, you have many options from which to choose in terms of how you receive your medical care. One of these options is the Health Maintenance Organization. Understanding how an HMO operates can help you to take advantage of all the benefits your plan offers.

Significance

• A health maintenance organization, or HMO, is a group health insurance plan, which provides medical services via a network of member hospitals, physicians and specialists for a prepaid monthly fee called a premium. Upon enrollment in an HMO plan, members must select a primary care physician, PCP, who manages and provides basic health care services. Visits to a specialist and appointments for diagnostic and lab tests require a referral from your PCP to an in-network specialist who will provide these services.

Benefits

• One benefit of using an HMO is that your medical expenses are relatively low compared with other types of health insurance plans; your costs typically include just your monthly premiums and co-pays for physician and specialist visits. Another benefit to using an HMO is that your health care is streamlined in that your PCP coordinates all of your health care visits and needs vs. you having to coordinate your own care.

Considerations

• Although HMOs are typically less expensive than other types of health insurance, they are not as flexible as other plans. For example, you must get a referral before you can see a specialist and you must pay out of pocket for physicians and specialists not included in your network.