Health Maintenance Organizations (HMO)
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Choosing an insurance policy means considering a variety of policy types, including PPOs, PSOs and HMOS. In particular, HMOs have gotten a bad name. The sentence, "My HMO" almost never ends well, but the sometimes negative perception of these organizations is due in part to the policyholder's expectations. HMOs do limit your choices for health care providers, but they also save you money - often a lot of money - while ensuring that you can receive medical attention when you need it. When you sign up for an HMO, you need to know what to expect and plan your medical care accordingly.
Purchasing an HMO insurance policy means you will receive coverage only for the doctors, clinics and hospitals in that particular network. These healthcare providers are under contract to the HMO, so they benefit from having a stream of patients sent to them for care. You benefit because you pay lower premiums and save on other costs through these policies.
HMOs are only in-network policies. If you wish to see a doctor who is not a member of the HMO network, none of the services will be covered unless you have an emergency or, in some cases, are having a routine test.
PCP and Referrals
HMO coverage usually means you need to choose a primary care physician (PCP) who is in the network. This doctor will be listed on your policy as your main medical caregiver. Almost all of your medical care has to be coordinated through this PCP. If your doctor moves out of network, you have to choose another one to continue receiving coverage. You do not have the option of "following" your previous PCP.
Unlike some other policy types, an HMO also usually requires that you get a referral from your PCP before you see a specialist. If you need to see a cardiologist, your PCP must make an official referral, otherwise your visit will not be paid for through your policy. Some people find this extra step frustrating since they are used to seeking the help they want without needing permission. Of course, the specialist needs to be in-network as well for your policy to pay out.
Some HMO policies do not require a PCP or specialist referral, but they do demand that your providers be in-network. You need to verify the restrictions before you sign up for coverage.
When you are shopping for insurance, you will notice that the most affordable plans are often the HMO offerings. That's because their contracts with individual doctors, clinics and hospitals keep the prices for services low. As a result, monthly premiums are usually quite affordable. In addition, you will have a low or non-existent deductible and low copays. You can expect to save hundreds if not thousands of dollars each year with an HMO policy if you follow the rules and restrictions associated with that type of coverage.
HMO medical providers are generally local, which is not a big issue if you live in a community with quality health care. If you live in a rural area, you need to make certain your medical needs are properly covered by the providers in your network. You cannot simply seek out the best specialist around and get the treatment you need. You have to choose someone in your HMO unless you want to pay out-of-pocket, which is an expensive proposition.
Some out-of-network services are covered. For instance, if you need emergency care and you are far from home, you obviously cannot wait to return for treatment. In that instance and other emergencies, your policy should pay.. Some healthcare screenings, such as routine mammograms, should also be covered out-of-network. However, before undergoing any out-of-network treatment, you should check with your insurer if at all possible to avoid expensive billing surprises.
Not every HMO is the same, but they have several important items in common: they save you money and restrict your healthcare choices. If you like having lots of options, you may find an HMO frustrating.
For many people, however, an HMO will meet most if not all of their medical needs for an affordable price. If you have limited finances, an HMO may be the only way for you to purchases much-needed healthcare insurance.
You may find that an HMO works well for you if you and your family members are generally healthy. If you visit the doctor rarely and have no chronic illnesses, the limitations of an HMO will not bother you or seriously affect your medical care. Even if you do experience an unexpected illness, you will still have access to local healthcare.
If you have a long history with certain specialists or have a challenging disease that requires advanced treatments not locally available, an HMO may not work as well for you. Your individual health should inform your decision. Of course, HMO coverage is certainly far superior to having no coverage. Today, no one can safely live without any medical insurance.
HMOs often get a bad rap, but they are simply an alternative to more traditional insurance policies. If your employer only offers an HMO, you really don't have much choice. If you are purchasing coverage individually, you need to consider your current health situation and financial status before choosing a policy. An HMO delivers what it promises. You have to decide if you can live with its rules.