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HMO Health Insurance Plan: How Does It Work?
A Health Maintenance Organization insurance or HMO insurance is a managed care organization that is designed to provide health services fulfilled by physicians, hospitals or clinics, and other providers that are part of the HMO network. Compared with the traditional indemnity insurance, an HMO health insurance plan only provides care rendered by doctors and other health care professionals who signed the HMO contract.
How Does HMO Work?
The insured selects a primary care physician or a doctor who is the “gatekeeper” to access to medical services. Primary care physicians are usually pediatricians, internists, general practitioners, or family doctors. When the patient or the insured needs another physician, the primary doctor will have to give referral to other doctors that are within the network of the insured’s insurance provider.
Another type of HMO does not require the primary care physician’s referral to see another specialist. This type of HMO insurance, however, may be more expensive than the typical one and may require a co-payment.
In order to keep the people insured from acquiring disease that requires high-cost treatments or frequent treatments, HMO often offer preventive care services for free or for a lower cost. These preventive care services include baby checkups, mammograms, immunizations, or physicals. Some HMO health insurance also offers services, such as mental health care and case management or disease management. Such care or services also aims at identifying patients with chronic disease, such as cancer, asthma, or diabetes. In such cases, the HMO offers care and appropriate treatment so as not to worsen the patient’s condition.
In the U.S., HMOs are regulated by the state and federal governments. HMOs’ license is known as a Certificate of Authority and HMOs are licensed by the states.
HMO Insurance Advantages and Disadvantages
- HMOs encourage members to get a regular check up in order to prevent acquiring or worsening a disease. This also allows detecting diseases in the early stages.
- Unfortunately, to save money or utilize HMO benefits, members will have to choose a primary care physician that is part of the HMO. Otherwise, they will have to find another doctor that’s part of the network.
- To become a member, you are required to pay a flat fee premium, which means that this fee or monthly premium will not fluctuate or change.
- HMOs usually do not pay for care rendered by health care providers outside of the network. Thus, to make use of the benefits, you have to choose to consult HMO doctors and go to HMO hospitals.
- In the event of the insured’s death or divorce, spouse and children can choose to continue on with the HMO insurance plan.
- It can be sponsored by government employers, labor unions, or individual hospitals.
- It offers low cost or free care services for early detection and prevention of diseases.
HMO health insurance plan is a great option and may work well with some people in certain situations. Although there are restrictions, HMOs provide excellent health coverage and are usually readily available.
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