Health Maintenance Organizations (HMOs)

Health maintenance organizations, or HMOs, charge a monthly fee and in return, the insurance company and its network provide a variety of benefits. The services provided vary from plan to plan, so comparison shopping is always a good idea.

With an HMO, you are agreeing to use one company’s network (although exceptions are occasionally made in the case of emergency). This means you will pick your primary care physician from a list of approved physicians provided by the insurer. Your selected physician will be responsible for your general health care, prescriptions, referrals, and approval of any additional medical treatment.

HMOs require you to make a co-payment for visits and prescriptions (on average, a general visit to your physician would run you between five and twenty dollars). However, if you seek care outside your HMO’s network, you will be charged full price.

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Like all insurance plans, HMOs have advantages and disadvantages.

Advantages Include:

• Reduced amount of paperwork – HMO members are usually given a card which they can present at their doctor’s office or pharmacy in place of filling out forms.
• Low out-of-pocket costs – the co-pays you are responsible for through an HMO plan are often less than the deductibles you would pay with other types of insurance.
• Focus on preventative care – because it is in your HMO’s better interest to treat you before you become seriously ill, HMOs encourage their members to seek treatment early and often offer benefits such as discounted fitness club memberships or health education classes.

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Disadvantages Include:

• Limitation to the HMO’s network – if you currently see a physician that is not part of the HMO’s network, you will have to find a new physician approved by the network or pay full-price for your visits. In addition, doctors and hospitals can opt to leave a network, leaving you back at square one.
• Difficulty getting specialized treatment – your primary care physician must be consulted before obtaining care from another physician or specialist. He or she must provide you with a referral. If you seek specialized treatment without a network referral, you will be responsible for the cost.
• HMO plans can be a good choice for many people. Shop around and find one that has providers and facilities conveniently located to your home or work area. People who make frequent non-emergency doctor visits – such as women and children – are good candidates for an HMO. HMOs may not be a good option for those who travel frequently or are attached to a specific physician who is not part of the HMO’s network.

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