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HMO Advantages

Health Maintenance Organizations (HMO) offer more expensive health insurance as compared to a Preferred Provider Organization (PPO) or Point of Service (POS) plan. They are also more tightly controlled than other kinds of health insurance. Despite these issues, many employers choose HMOs over less expensive plans.

  1. Structure and Purpose

    • An HMO focuses on preventative medicine. By structuring costs and services around regular checkups and maintaining a healthy lifestyle, HMOs can catch many health problems before they become serious, often before they occur. For patients, this can mean longer and healthier lives. For businesses providing employee insurance, it can lead to healthier employees and reduced absenteeism.

    Predictable Expenses

    • HMOs typically replace deductibles for medical services with low, often token, copayments. This means that, although the monthly premium might be higher, medical expenses for members don't vary significantly from month to month. For many, a slightly higher predictable expense is a better option than a widely varying expense that may sometimes be quite low, sometimes quite high. Some HMOs go so far as to waive even the copayments for wellness visits.

    Lifetime Maximums

    • HMOs typically have no lifetime maximum payout, a cap on benefits that is standard practice for other insurance models. Those HMOs that do have such caps generally set the maximum very high or have policies that rapidly "reload" a member's account.

    Adjunct Services

    • Many HMOs operate all aspects of client care from a single building, handling tests, examinations, and consultations in a manner broadly reminiscent of assembly lines. Though impersonal, this can be very convenient and cost-reducing. Tests that, in other models, might require a newly scheduled appointment are instead dealt with in a few minutes on the patient's way out of the building.

    Wellness Classes

    • HMOs frequently offer wellness classes on topics ranging from stress relief to parenting to chronic illness support. The tuition for these classes is often much lower than that for comparable classes from other sources.

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