What Is An HMO Plan?

What is an HMO plan?

An HMO insurance plan is one of many options for health care services that people can select from. The abbreviation HMO means "Health Maintenance Organization." These types of policies offer healthcare service to their members utilizing a network the providers who have agreed to provide these services at discounted rates. Most other types of plans have a less broad range of preventative healthcare services. That said, each plan is different, so researching multiple types of plans is usually the best idea.

How Does On HMO Plan Work?

Members of an HMO are required to utilize a primary care physician or PCP. Your primary care physician takes care of the majority of your healthcare needs, and before seeing a specialist, a referral from your PCP is often required from your insurance company.

One of the benefits of HMO plans is that they generally provide members with lower out-of-pocket expenses for healthcare. Each plan and company is different, so reading over your policy is essential in order to help compare the differences between each policy. In some cases, HMO members are not required to pay a deductible before their health insurance coverage starts. Also, HMO plans are more likely to have lower copayments. 

Another benefit of an HMO plan is that the claims that are submitted to the insurance company are taken care of by your providers, you do not need to submit your own claims.

Often, there is no coverage for services that are provided by out-of-network doctors, specialists, or companies, at least without a proper referral from your primary care physician.

An HMO Plan Might Be Right For You If

The benefits that HMO plans provide make some fantastic plans for some groups of people. People that are looking for a health insurance plan with lower premiums can often find them with HMO plans. These types of plans are also very beneficial for people that are looking to have no deductible and who also do not mind having an out-of-pocket limit. Healthy people whose medical expenses mostly include preventative care services may also find that an HMO plan is the best decision for them.