HMO Health Insurance Plans — eHealth
what is hmo insurance?
A health maintenance organization, or hmo, is a type of insurance plan that contracts with physicians and health care groups to provide health care services to hmo subscribers. HMO insurance is one of the most popular health insurance plans due to its lower cost and the fact that it provides broader access to medical care.
People often choose an hmo insurance plan because their personal doctor is usually already in the hmo network.
Reading: What is hmo medical insurance
how does an hmo plan work?
hmo plans operate on a network. the network is a group of providers that are contracted with your insurance. In most cases, HMO plans only cover care provided by these doctors, labs, and hospitals. however, emergency medical care may be an exception.
Usually, you will be asked to choose a primary care physician that you see for most treatments. when you need to see a specialist, you will need a referral.
In addition to limiting where you can receive care, there may also be restrictions on the number of visits that are covered.
benefits of an hmo plan
The initial benefit of an HMO plan is the fact that it costs less than other types of health insurance, including Preferred Provider Organizations (PPOS). You can also enjoy better access to health care, encouragement for low- or no-cost annual physicals, and a larger network of general practitioners and specialists.
Recipes also tend to cost less due to the purchasing power of the group. Billing is generally easier because health insurance companies negotiate the cost of services with the health care provider before entering into a contract.
difference between hmo and ppo plan
It’s important to choose the right health plan that meets your needs and provides the coverage you’re looking for, whether it’s an hmo or a ppo. To help you determine which one might be right for you, we’ve outlined some of the key differences to consider when shopping.
The differences between hmo and ppo insurance plans are pretty straightforward. The main distinguishing factor for most consumers is that PPOS generally provide some coverage for out-of-network care. however, hmos costs less than ppos and has larger networks
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Let’s go over the differences between hmo and ppo plans in more detail.
primary care physicians
Joining an hmo plan generally requires that you designate a primary care physician who will be responsible for your medical care. the doctor you choose has to be part of the network. You will also need a referral from your doctor to see a specialist of any kind in order to get the costs covered by your hmo plan.
A ppo has the advantage of ensuring you can see your preferred primary care doctor, but they tend to be more expensive and you can run into restrictions when you least expect it. hmos tend to have larger networks with more doctors and specialists, although a ppo generally allows you to see a specialist without first getting a referral from a primary care doctor.
both ppos and hmos work on a network basis, but hmos tend to have larger networks to reduce costs and increase access to doctors. Your primary care doctor is most likely in the ppo and hmo networks. however, you may prefer to get hmo insurance over a ppo even if your provider is on a ppo due to cost differences.
Your health care costs will be lower if you stay in-network with both hmos and ppos, but hmos tend to be more restrictive when it comes to covering out-of-network care. Generally, an HMO does not cover out-of-network care, other than emergencies. in contrast, a ppo usually provides more coverage for an out-of-network visit, but not completely.
The cost of a ppo is higher because it gives you the option to see a provider of your choice and coverage for some out-of-network health care services. A PPO is also more likely to have a deductible that you must pay before certain health care costs are covered. Hmos are less likely to have deductibles and, when they do, are typically lower than ppo’s.
cost of an hmo plan
as mentioned above, the cost of an hmo plan is usually lower than a ppo plan. however, the cost depends on the type of plan you choose and the features you’d like to have included in the plan. The main reason an HMO is less expensive is due to the fact that the health care provider and insurer enter into a contract to manage the costs of care. Essentially, the insurer guarantees patients to the provider in exchange for lower health care costs. in turn, patients benefit from lower costs and the elimination of deductibles.
Another factor that affects the cost of an hmo plan is geographic location. When looking at health insurance by state and city, you’ll find that HMOS vary in terms of the size of their network. a large, dense geographic area has more health care providers than less populated areas. As a member of an HMO insurance plan, you are limited to providers who are contracted with health insurance companies.
an hmo can lower costs when there are more health care providers to contract with.
hmo frequently asked questions
is it better hmo or ppo?
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The answer to this question comes down to preference and what you’re looking to get out of your health insurance.
An hmo has the advantage of a large network and lower cost, while a ppo allows you to see your preferred doctor and specialists without a referral. PPO costs more, but you may want to spend the extra money on a PPO plan to take advantage of the flexibility it offers.
If you’re okay with seeing any PCP that’s in the HMO network, then an HMO is a good option to save money and get quality care.
what are the pros and cons of an hmo?
advantages of an hmo include:
- lower cost
- largest provider network
- little or no deductible
- lower prices on prescriptions due to group purchasing power
- no off-net coverage
- required to designate a primary care physician upon enrollment
- required to get a referral from a doctor to see a specialist
disadvantages of an hmo include:
what is the main purpose of an hmo?
The primary purpose of an hmo is to control health care costs for subscribers and encourage them to participate in preventive health maintenance. Making a point to participate in regular health screenings helps a subscriber stay ahead of a problem that could become costly if not caught early.
an hmo plan may be right for you if:
You’re okay with seeing a doctor you don’t have a previous relationship with, you’re interested in getting regular health exams, and you want to save money on your health care. An hmo may also be right for you if the difference between hmo and ppo plans isn’t significant and you’re in an area where the hmo has a large network of health care providers.
When you’re ready to take the next step and find an hmo plan in your area, ehealth can help you find insurance that fits your budget and needs. With eHealth, you don’t have to worry about confusing plan descriptions and figuring out the sign-up process, our licensed insurance agents can guide you through the process and help you get covered quickly.
*definitions may vary by plan provider. read the provider’s summary of benefits.