What’s an HMO?

Health Maintenance Organizations (HMOs) are the most affordable managed care. And because of their affordability, they’re one of the most common health plans.

How Does It Work?

HMOs form a “network” of doctors, hospitals, and other healthcare providers. The care providers charge discounted rates for their medical services, in exchange for patient referrals from the HMO.

Because of this cost-saving arrangement, you’ll have lower premiums, deductibles, and co-payments.

After you find an HMO plan, you’ll choose a primary care physician — a doctor such as an internal medicine physician, general practitioner, or OB/GYN. You’ll go to your chosen primary care physician first for health reasons. And if you need a specialist, your primary care physician will need to give you a referral. 

So, What Are My Costs?

Each month you’ll have to pay a premium to keep your policy in effect. Your premium is based on your health status, past medical conditions, and some other factors such as where you live and what your lifestyle is like.

The other cost you will be responsible for are co-payments. They’re a fixed amount that you pay for medical expenses, such as doctor’s visits and prescriptions.

Some healthcare plans require a deductible — the part of a medical bill you have to pay out of your own pocket before your coverage starts. But many HMOs don’t require you pay a deductible.

Stay Covered

In an HMO, you’ll only have health coverage with care providers in the network. Your HMO plan generally can’t offer any coverage if you receive care with a doctor outside the network — and there aren’t many exceptions to this rule.
 
But for many people, the affordability of an HMO makes the restriction a worthwhile trade-off. If flexibility is more important to you, look into PPOs plans.

The best way to get the plan right for you is with the advice from our professional agents. And our free online quote service will let you compare different plans in minutes.