HMO
Health Maintenance Organization

Health maintenance organizations are prepaid health plans. As an HMO member, you and your family receive a wide variety of medical services in exchange for a set fee or a monthly premium.

The focus of HMOs is on health improvement programs and preventive care making sure that your basic medical needs are met before they become serious medical conditions. This way HMOs are able to keep health care costs down.

Access to health care providers: Unlike FFS, HMO limits your choices of doctors and hospitals to those who are in the plan’s list.

In some HMOs, doctors are salaried employees and have offices in a central medical facility at one or more locations within your community. Other HMOs contract with outside physician groups or individual doctors who have private practices. These are called individual practice associations (IPAs).

With HMOs, you are assigned or are required to choose one doctor who will serve as your primary doctor. This doctor acts as the 'gatekeeper' for all your medical needs. He or she will monitor your health and provide most of your medical care.

Your primary doctor is also responsible for referring you to specialists or other health care providers within the network for further medical treatment.

In most HMOs, you will not receive any benefits if you choose out-of- network health care providers, except during emergencies or when medically necessary. Check if your doctor is part of an HMO, this could be a good option for you.

Health Care Services: HMOs focus primarily on preventive care, which includes office visits, immunizations, well-baby checkups, mammograms, and physicals.

HMOs also cover hospital stays, emergency care, surgery, lab tests, x- rays, and therapy. However, specific health care services, such as outpatient mental health care and skilled nursing care, are covered only on a limited basis.

When considering an HMO plan, know what medical services are covered and those that are not. It is important that you compare available plans since the range of health care services HMOs cover varies.

Cost/Cost Management: You pay HMOs a fixed fee for your covered medical care in the form of monthly or quarterly premiums.

Generally, HMOs do not have deductibles, although most plans may require a small co-payment, typically $10-20 for each doctor's visit or $25 for hospital emergency room treatment.

In HMOs, you are not required to fill out claim forms for office visits or hospital stays. All you have to do is present your member card during your visit to your doctor’s office or at the hospital.

Advantages: HMOs offer comprehensive health care, including a wide range of preventive care and health improvement programs. Your total medical costs will likely be lower and more predictable in an HMO than with fee-for-service insurance.

Furthermore, there's minimal paperwork. There's no need to keep receipts or fill out claim forms.

Disadvantages: Limited choice of doctors and hospitals. Unlike in FFS, with HMOs you may not be able to get an appointment immediately. You need a referral from your primary care physician before you can see a specialist. If you use a provider outside of the plan, the policy will not cover the charges.

HMO may be a good option for you if you don’t mind limiting your choices of doctors, and wish to keep your health care costs down.

Next, let's learn about PPO.


Proceed to Step 4: Know where to get Heatlh Insurance Coverage

7 Steps to Getting Affordable Health Insurance

Step 1: Know the Health Insurance Terms.

Step 2: Assess Your Health Insurance Plan Needs.

Step 3: Which Health Insurance Type is Right for You?

Step 4: Where to get Health Insurance Coverage.

Step 5: Get the Best Health Insurance Quote Available.

Step 6: Make the Right Health Insurance Choice.

Step 7: Submit your health insurance application.

Back to Top of HMO Health Plan

Back to Health Insurance Help Home