Health Maintenance Organization (HMO)

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Health Maintenance Organization (HMO)

Nobody wants to get sick. Falling ill does not only bring unwanted stress physically and emotionally, it can also burden you with a pile of medical bills. While we must do what we can to prevent getting sick, it is also beneficial to be prepared in case we do. One avenue that you can consider is health insurance. The health insurance marketplace offers different options that people can select from depending on their needs. If you are on the hunt for a suitable plan, this article is for you. Do you know what an HMO is? 

What is a Health Maintenance Organization (HMO)? 

A Health Maintenance Organization or HMO is a kind of insurance structure or plan that provides healthcare coverage to individuals via a network of physicians. For a monthly or an annual fee, HMO members can avail of medical care and services from doctors and healthcare providers who are under contract with the HMO. There are also designated in-network clinical facilities that members can go to. 

The primary purpose of a Health Maintenance Organization (HMO) is to promote wellness, preventive care, and provide healthcare to HMO members at a manageable cost through access to their network of physicians and facilities. 

I have an HMO plan. What process do I have to follow if I have a medical concern? 

If you have an HMO insured member, there is a specific process that you have to follow. Each member must initially choose a primary care physician or a PCP from their local health care providers who are within the HMO network. 

The PCP is the first person to whom you will go for any health-related concern. The role of the primary care physician is to assess your situation and, if needed, give you a referral to an in-network specialist. Co-payments are needed for certain specialist consultations, services, and prescriptions. In an HMO structure, an insured individual will not be able to go directly to a specialist. Each person needs to see a primary care physician first to obtain a referral. 

What are important reminders in using a Health Maintenance Organization (HMO)? 

Only health care providers, physicians, and specialists under contract with the HMO will be available to HMO members. Furthermore, only in-network clinics, hospitals, pharmacies, and other medical facilities must be used. If an individual receives care from a doctor or clinic outside of the HMO network of resources, the services may not be covered by the HMO insurance plan. 

What are the benefits of a Health Maintenance Organization (HMO)?

HMOs promote disease prevention by encouraging their members to undergo an annual check-up. This way, illnesses can be prevented and medical treatment can be sought during the early stage of the disease. Another evident advantage is its cost-effectiveness compared with other health insurance plans. By paying a monthly or annual fee, HMO members have access to a wide range of healthcare resources available in the HMO network. Co-payments and other out-of-pocket expenses are still considered less expensive. Finally, the billing system for HMOs is also simpler and less complicated. Members will not be required to submit claims with extensive paperwork to obtain referrals. 

What are the possible disadvantages of a Health Maintenance Organization (HMO)?

In an HMO structure, members are limited to the doctors, specialists, and facilities within the HMO network. Services sought outside of the HMO network will not be covered. Another possible drawback is that all members must seek their primary care physician first before going to a specialist. Obtaining a referral is a must. For patients who are in a hurry to see a specialist for a particular health condition, this initial step may be burdensome and time-consuming. 

What is the difference between an HMO and a PPO? 

A PPO stands for Preferred Provider Organization. It is also a type of medical care plan that provides healthcare services to PPO members at lower rates. However, the difference is that members do not have to get a referral from a primary care physician to see a specialist. Members are also allowed to choose out-of-network doctors. However, this will cost higher. On the other hand, an HMO requires a referral from a primary care physician and services from in-network doctors and clinics only. The choice between getting an HMO and a PPO depends on an individual’s needs, budget, and situation. 


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