HMO Plans

Health Maintenance Organization Plans, HMO plans for short, limit health care services to a specific network of doctors and hospitals that contract with the health insurance company to provide care at a reduced rate. This helps keep costs down for the insurer and its subscribers. HMO plans usually require that you select a primary care physician (PCP) to manage your health and coordinate your treatment. This physician is your gatekeeper and typically must approve any visit to a specialist, except in emergencies. For example, if you have a rash, your PCP will examine you and may give you a referral to see a dermatologist in the HMO network.

The HMO network is smaller than PPO networks, and your provider may only cover care that occurs in-network. However, there are some HMOs that allow you to see out-of-network providers, but you’ll typically pay more for that care. If you’re not comfortable with the idea of picking a PCP and always needing a doctor’s referral to get specialty care, an HMO might not be right for you. Instead, consider a preferred provider organization (PPO) plan that allows you to go outside the network for care. Another option is a point of service (POS) plan, which blends elements of both an HMO and a PPO.

How to Decide between HMOs, PPOs, and Other Plans?

Many employers offer a variety of health insurance plans. Choosing the right plan for you will depend on your personal preferences and how much you are willing to pay. Typically, HMOs cost less than PPO or EPO plans because they only cover healthcare providers who are in the plan’s network. However, some HMOs offer a point-of-service option that allows members to see out-of-network providers at a higher cost. When deciding between HMOs, PPOs, and other health insurance plans, consider the type of care you need. If you are in need of a specialist, be sure to find out if they are part of the plan’s network. Otherwise, you could wind up with a big medical bill if you visit an out-of-network specialist or have your blood work done by an out-of-network lab.

HMOs also have lower premiums, meaning you will pay less each month to cover yourself and your family. Generally, they have low deductibles and require you to select a primary care physician to manage your health and refer you for specialty care. This helps control costs by making it harder to go out-of-network for services since a referral is required. The drawback is that switching to a different physician can be difficult when you move or change jobs. This can lead to gaps in your coverage that might cause you to miss out on important medical treatments.