HMO Health Insurance Explained

One of the most common questions about health insurance is what type to buy. Each type has its own benefits and downsides. Understanding these upfront will help you make the best possible decision. If you are considering an HMO, here is some information that may help you to decide.

First, you need to understand what an HMO, or health maintenance organization, really is. This is a type of insurance that contracts with health care providers to create a network of service providers. Each insured individual chooses a Primary Care Physician from that network, and that physician is paid based on the number of people in his care, whether or not they are seen each month. Also, the Primary Care Physician determines whether or not the insured individual needs the help of specialist and must provide a referral before the person can visit another doctor.

If you are on an HMO, you are required to take advantage of the services of doctors that are in the HMO network. If a doctor is not in the network, you will pay for your care without insurance help. You may have to pay a co-payment when you visit your in-network doctor, but you typically do not have a deductible to worry about when in an HMO structure.

So what are the benefits of an HMO? The main benefit is the fact that you will not have to struggle with meeting a large deductible before your coverage kicks in. You will be covered from the moment you get your policy, and unless you have a co-pay to pay, you will not have to pay for your medical care. This means you will not have to weigh the cost for care over the potential benefit if you are struggling with a health issue.

The downside to an HMO is the limitation that you have to choose a primary care doctor and specialists in your network. If the network is broad, this is not a problem, but if the HMO has a very small network, you may not be pleased with your choices for service providers. Also, some patients feel it is inconvenient to have to use a primary care provider and get a referral before seeing a specialist. Finally, some HMO structures create long wait times for service. Because the doctor is paid per patient on the plan, not per patient he sees, he is not as driven to ensure that you are seen in a timely manner if you are dealing with a minor health complaint.

All in all, if you are offered an HMO by your employer, you may not have another option. These are great insurance structures in most situations. As long as your favorite doctor is on the plan, you will likely not mind having an HMO.

Be sure to read out other articles for more answers to your Insurance Questsions