Types of HMO

Health Maintenance Organizations (HMOs)

Health maintenance organizations are prepaid health plans. As an HMO member, insured pay a monthly premium. In exchange, the HMO provides comprehensive care for the insured & his family, including doctors' visits, hospital stays, emergency care, surgery, laboratory (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, patient 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 co-payment for each office visit, such as $5 for a doctor's visit or $25 for hospital emergency room treatment. Individual total medical costs will likely be lower and more predictable in an HMO than with fee-for-service insurance.

Because HMOs receive a fixed fee for your covered medical care, it is in their interest to make sure patient 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 varies 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 individual may have to wait longer for an appointment than he would with a fee-for-service plan.

In some HMOs, doctors are salaried and they all have offices in an HMO building at one or more locations in individual’s 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. Individual select a doctor from a list of participating physicians that make up the IPA network. If an individual is thinking of switching into an IPA-type of HMO, he needs to check whether doctor participates in the plan.

In almost all HMOs, individuals are either assigned or choose one doctor to serve as patient’s primary care doctor. This doctor monitors health and provides most of patient’s medical care, referring to specialists and other health care professionals as needed. Patient usually cannot see a specialist without a referral from primary care doctor who is expected to manage the care received by the patient. This is one way that HMOs can limit patient’s choice.

Types of HMOs






HMO Plans

HMOs are the least expensive, but also the least flexible of all the health insurance plans. They are geared more toward members of a group seeking health insurance.

HMO advantages: 


HMO disadvantages:

• Individual must choose a primary care physician, also known as a PCP.

• HMOs require that individual see only network doctors or they won't pay.

• Individual must get a referral from your PCP to see a specialist.

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