Health Insurance shoppers faced with choosing a health insurance plan usually have a variety of choices. Among the options, you will find Health Maintenance Organization (HMO) Plan and a Preferred Provider Organization (PPO) plan. Often you also have the choice of point of sale (POS), among others.
As the cost of health care continues to rise, those seeking insurance are looking at HMOs as a reliable alternative to reduce the cost of coverage.
HMO plans have been around for close to a hundred years. The first HMO plan is said to have been established in 1929 by the Ross-Loos Medical Group.
HMOs come in different group models. The differences may be important to you as your options vary by type of organizational structure:
Closed Panel – Under this model, also known as the “Group Model,” the Health Maintenance Organization pays a group of physicians to provide multi-specialty services to their members. Specialties include internists, OBGYNs, surgeons, and oncologists contracting exclusively with the HMO. Member care is administered at facilities owned by the group or the HMO. Patients under this plan need to use the group to have their medical expenses covered.
Staff Model – This is another example of the closed panel model with a variation. The HMO hires physicians, specialists, and ancillary care providers in the staff model and houses them in buildings owned by the HMOs. They are direct employees of the HMO. Members must also use these groups if they are to have their medical expenses covered.
Open Panel Model – This is a variation of traditional health insurance. Under this model, the HMO has a list of participating physicians that a patient can go to. The insured has a broader selection of physician choices. The doctors are not obligated to treat a patient, and they can treat non-HMO patients as well. The participating doctors have their practice. Aside from the agreement to be paid by the HMO if they provide care for a member, they are independent of the HMO.
How HMO Plans work
Health Maintenance Organizations are a form of managed health care. According to CBS News, it is the most common form of managed care. Most HMO plans have some fundamental characteristics that are uniform across providers.
Primary Care Physicians – Generally, HMOs require that you have a PCP who will coordinate all your health care needs. This is typically a family care physician, an internist, or a pediatrician.
The benefit of having such a close relationship with one doctor is they get to know you very well. A vital relationship forms between a patient and a doctor when they have worked together for an extended period.
Oftentimes, there is more than just running tests and taking blood samples to keep a patient healthy. It is, therefore, essential that you feel very comfortable confiding in your primary doctor.
The primary care physician usually must authorize any specialists, labs, x-rays, etcetera. He is the director of your health care.
You must use in-network providers – Every HMO has a list of in-network doctors, specialists, labs, x-ray facilities, and therapists. If the insured wants to have their medical expenses covered, they must use these approved providers. There are rare exceptions, and they are covered as part of the HMO policy. Examples are; true emergencies and the rare case in which you need a particular specialist, and the HMO does not have a provider in their network. The insured is well advised to keep their HMO in the loop to ensure they don’t step outside the policy provisions.
Benefits of HMOs
There are advantages and disadvantages to HMOs. One of the biggest benefits of these plans is that they offer very comprehensive coverage at the lowest cost of practically all forms of insurance. There are typically no maximum lifetime payout limits which are customary with other forms of insurance.
Health Maintenance Organizations focus on the wellbeing of the insured. They encourage healthy living habits and enable members to use preventive medicine. They usually provide free health screenings, offer gym membership discounts and provide members with various forms of health education.
Drawbacks of HMOs
The primary disadvantages of HMO plans are; limited choice of physicians. If you have a preferred doctor and want to go into an HMO plan, they may not have your doctor on the list. You also need to seek a referral for any special needs you have outside of your primary care physician. Different HMOs have levels of service that vary in turning these referrals around.
To learn more about individual health plan options, contact the experts! Our licensed health insurance specialists will be happy to answer any questions you have.