HMO Health Insurance
Health Maintenance Organizations (HMOs)
Health maintenance organizations are prepaid health plans. As an HMO member, you pay a monthly premium. In exchange, the HMO provides comprehensive care for you and your family, including doctors' visits, hospital stays, emergency care, surgery, lab tests, x-rays, and therapy.
The HMO arranges for this care either directly in its own group practice and/or through doctors and other health care professionals under contract. Usually, your choices of doctors and hospitals are limited to those that have agreements with the HMO to provide care. However, exceptions are made in emergencies or when medically necessary.
There may be a small copayment for each office visit, such as $5 for a doctor's visit or $25 for hospital emergency room treatment. Your total medical costs will likely be lower and more predictable in an HMO than with fee-for-service insurance.
[HMO health insurance copays are now more likely to be $20 to $40 for a doctor's visit and $150 or so for an emergency room visit. HMO health insurance costs are at their most predictable with a closed panel model when there are no claims to pay unless outside facilities must be used. - ed.]
Because HMOs receive a fixed fee for your covered medical care, it is in their interest to make sure you get basic health care for problems before they become serious. HMOs typically provide preventive care, such as office visits, immunizations, well-baby checkups, mammograms, and physicals. The range of services covered vary in HMOs, so it is important to compare available plans. Some services, such as outpatient mental health care, often are provided only on a limited basis.
Many people like HMOs because they do not require claim forms for office visits or hospital stays. Instead, members present a card, like a credit card, at the doctor's office or hospital. However, in an HMO you may have to wait longer for an appointment than you would with a fee-for-service plan.
[It is not necessarily true that you have to wait longer for an appointment with HMO health insurance. There are different types of HMO models, some using physicians in private practice, and there can be long waits at fee-for-service offices also.]
In some HMOs, doctors are salaried and they all have offices in an HMO building at one or more locations in your community as part of a prepaid group practice. In others, independent groups of doctors contract with the HMO to take care of patients. These are called individual practice associations (IPAs) and they are made up of private physicians in private offices who agree to care for HMO members. You select a doctor from a list of participating physicians that make up the IPA network. If you are thinking of switching into an IPA-type of HMO, ask your doctor if he or she participates in the plan.
In almost all HMOs, you either are assigned or you choose one doctor to serve as your primary care doctor. This doctor monitors your health and provides most of your medical care, referring you to specialists and other health care professionals as needed. You usually cannot see a specialist without a referral from your primary care doctor who is expected to manage the care you receive. This is one way that HMOs can limit your choice.
[Some HMO health insurance now has no mandated primary care doctor (a.k.a. "gatekeeper") and so no need for referrals. The purpose of the primary care doctor managing all care in HMO health insurance is that "You need some kind of generalist to pull all the pieces together and function as the patient's advocate in a health system. One of the unfortunate things about the idea of gatekeeping is that it has come to be thought of as a way of limiting access rather than promoting the best possible set of services for patients." (Paul Ellwood Jr., M.D., Managed Care Magazine 1997) - ed.]
Before choosing an HMO, it is a good idea to talk to people you know who are enrolled in it. Ask them how they like the services and care given.
Questions to Ask About an HMO
- Are there many doctors to choose from? Do you select from a list of contract physicians or from the available staff of a group practice? Which doctors are accepting new patients? How hard is it to change doctors if you decide you want someone else? How are referrals to specialists handled?
- Is it easy to get appointments? How far in advance must routine visits be scheduled? What arrangements does the HMO have for handling emergency care?
- Does the HMO offer the services I want? What preventive services are provided? Are there limits on medical tests, surgery, mental health care, home care, or other support offered? What if you need a special service not provided by the HMO?
- What is the service area of the HMO? Where are the facilities located in your community that serve HMO members? How convenient to your home and workplace are the doctors, hospitals, and emergency care centers that make up the HMO network? What happens if you or a family member are out of town and need medical treatment?
- What will the HMO plan cost? What is the yearly total for monthly fees? In addition, are there copayments for office visits, emergency care, prescribed drugs, or other services? How much?
[Many employers have chosen HMO health insurance because it has less out-of-pocket for the same premium. However, some employers are now replacing low copay HMO health insurance with lower premium plans like health savings account qualifying plans, whether HMO or PPO, because plan premium costs are becoming prohibitive. - ed.]