What is an HMO?
An HMO stands for Health Maintenance Organization. HMO’s were the original way we
tried to control rising health care costs. The insurance companies’ original answer
was to manage the care, control services, and reward people for using preventitive
medicine. to increasing health care costs. The thinking was to cover wellness visits,
and focus on preventative measures to help control costs.
HMOs At-a-Glance
Positives
Lower costs for services rendered than comparable PPO plans. Lower maximum out of
pocket amounts than similar PPO plans. Generally an HMO will cover labs, tests,
and x-rays with the doctors office visit co-pay. There may be a deductible and/or
co-insurance at the hospital, but the maximum out of pocket is generally far below
that of most PPO plans.
Negatives
Expensive monthly premiums. Reduced doctors selection. Limited access to providers.
The practical result of HMO plans were capitated reimbursements to providers, (eg.
reduced payments to doctors) and the development of strict referrals and gate keepers
physicians.
Popular Individual HMO Plans
Pacificare HMO 70/50 5000, Blue Cross Select HMO.
It used to be that Health Maintenance Organizations (HMOs) were less expensive,
than other types of health insurance plans. However, due to rising costs, HMOs are
no longer a less expensive alternative. Also, HMOs remain the least flexible type
of health plan. They also tend to be geared more toward members of group plans than
individuals. In exchange for a low co-payment (or sometimes no co-pay at all), low
premiums and minimal paperwork, an HMO requires that you only see its doctors, and
that you get a referral from your primary care physician before you see a specialist.
If you can still pick up the phone, you'll probably need to get clearance before
you can visit the emergency room.
How does an HMO Plan work?
Though there are many variations, HMO (Health Maintenance Organizations)
plans typically enable members to have lower out-of-pocket healthcare expenses but
also offer less flexibility in the choice of physicians or hospital than other health
insurance plans. As a member of an HMO, you'll be required to choose a primary care
physician (PCP). Your PCP will take care of most of your healthcare needs. Before
you can see a specialist, you'll need to obtain a referral from your PCP.
With an HMO you'll likely have coverage for a broader range of preventive healthcare
services than you would through another type of plan. You may not be required to
pay a deductible before coverage starts and your co-payments will likely be minimal.
With an HMO plan, you typically won't have to submit any of your own claims to the
insurance company. However, keep in mind that you'll likely have no coverage whatsoever
for services rendered by non-network providers or for services rendered without
a proper referral from your PCP. As a member of an HMO ("Health Maintenance Organizations"),
you'll be required to choose a primary care physician (PCP).
Your PCP will take care of most of your health care needs. Before you can see a
specialist, you'll need to obtain a referral from your PCP. With an HMO you'll likely
have coverage for a broader range of preventive healthcare services than through
any other type of health insurance plan. Additionally, you probably won't have a
deductible to pay before services are covered. You also won't have to worry about
much if any of the paperwork involved in submitting claims. However, keep in mind
that you'll likely have no coverage whatsoever for services rendered by non-network
providers or services rendered without a proper referral from your PCP.
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