HMO Health Insurance

Quick Guide to HMO Health Insurance Plans

Millions of men and women across the nation receive their health care through managed health care plans. HMOs (Health Maintenance Organizations) are one of the most popular and cost effective forms of managed healthcare insurance. Keep reading to learn the basics of what an HMO is, how this type of managed health care plans works, and how it compares to other types of managed health care plans.

What is Managed Healthcare?

Managed health care plans are medical insurance plans intended to cover a broad range of services from preventative care, to prescription medications, to hospital care and beyond. These types of health care plans contract with local physicians, hospitals, pharmacies, and x-ray centers to create a network. Insurance companies can then offer lowered rates to employers and to individuals who are covered through the plans.

What is HMO Healthcare?

An HMO is one type of managed healthcare plan. HMOs negotiate with in-network healthcare providers to provide lower prices to those who are insured through their plans. With an HMO plan, the insured is required to select a primary care physician from within the HMO’s network. Often the primary care physician will be a pediatrician or family doctor. This physician is then responsible for providing most of your health care and for connecting you with other health care services.

With most HMO plans your primary care physician must provide a referral for you to visit an in-network specialist in order for the insurance plan to pay the full cost as determined by the plan. You may also need to get a referral from your primary care physician for other types of non-emergency care under an HMO plan. Many HMO plans focus on preventative healthcare and may not provide coverage for treatments deemed to be unnecessary.

In-Network and Out of Network Costs

HMO plans require co-payments to be made by the insured for each medical visit in addition to the insurance plan’s premium costs. Exactly how much those co-payments are depends on the particular plan. One thing that is true of all HMO plans however is that remaining in-network is the way to save. HMO plans will not cover the costs accrued when you seek health care from providers that are not in-network.

What are the Pros and Cons of HMO Healthcare Plans?

On average, HMO healthcare coverage is less expensive than other types of managed healthcare insurance. Premiums are typically lower than the premiums for comparable traditional health care plans and the co-pays are small. HMO plans offer a lower cost alternative to those who would not otherwise be able to find healthcare coverage.

However, while they are more affordable, HMO plans are also much more restrictive than other managed health insurance plans such as Preferred Provider plans. HMOs have contracts with the healthcare providers in their network. Out-of-network providers do not have contracts with the HMO and therefore the HMO plan will not cover your costs if you choose to visit an out-of-network doctor, specialist, or hospital.