The Meaning of HMO

HMO most often refers to health maintenance organizations. HMOs offer health insurance to their subscribers through a network of approved physicians, often with predetermined prices for common procedures and tests.

Subscribers

• The terms "subscriber" and "member" are often used interchangeably to refer to both employers and employees insured under an HMO group plan. Commonly, employees and their employers share the cost of monthly premiums paid in exchange for coverage from a health maintenance organization. Individuals and their families are also responsible for co-payments for services from their doctors.

Costs of Health Care

• HMOs strive to manage the costs of health care by setting maximum prices to be paid for common procedures, tests, or other physician services. In addition, HMOs often show preference for less expensive procedures and may only permit a higher priced treatment if previous cheaper options are ineffective.

Network

• Doctors that will accept a given health maintenance organization's price for procedures and tests agree to become part of the HMO's "network." Your HMO will likely require you to visit in-network physicians for coverage, though some will permit out-of-network physicians if you are willing to pay more for the treatment.