HMO - Health Maintenance Organization

Health Maintenance Organization or HMO for short and as this plan is normally called, is one of the most cost effective health plans available. HMO is a network of doctors, hospitals and insurers and the subscribers of the HMO health insurance plan need to select a service provider from one of the network participants. If you see a doctor that is not in the HMO network, this plan would not cover any expenses you incur with that doctor's visit or prescription or procedures.

 

Therefore, HMO's basic principle is that you need to choose a primary care physician to whom you go to for all your medical needs. This primary care physician should be a member of the HMO network. You can only go to another specialist if you are referred to by your primary care physician.

 

Main Features of HMO (only if you use the in-network service providers):

 

  1. There is no individual or family deductible.

  2. Out of pocket expenses are lower than the PPO plans.

  3. There is no life time maximum

  4. Doctors visits are covered 100% less a copay that varies from $20 to $40.

  5. Outpatient emergency visits are covered 100% if admitted, else a copay of about $75 is applicable.

  6. Inpatient hospital services are covered 100% less a copay of about $250 per admission.

 

Advantages of HMO Plans

 

As we see from the features of the HMO plans, there is no life time maximum and the out of pocket expenses are almost limited to copays. This makes the HMO plans very affordable and effective that can be useful even with long term or chronic illnesses.

 

Disadvantage of HMO Plans

 

The HMO plans strictly allow seeing only a physician in the HMO network. If you visit a doctor who is not part of the HMO network, the plan would not cover any expense at all from the visit to that doctor.

 

Secondly, you are kind of restricted in your options. If the primary care physician does not see a need to refer you to a specialist, you become restricted and may not be able to get a second opinion if you wish to.

 

In short, the HMO plan offers in-network benefits only and requires you to choose a primary care physician who acts as the first contact for all health care needs. You need referrals from the primary care specialist to see a specialist. The out of pocket expenses are typically limited to copays.