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What is HMO?

Health Maintenance Organization (HMO) is an insurance plan that requires that beneficiaries receive care from doctors who work for or have a contract with HMO. You will need to reside or work in a coverage area to be eligible for this benefit unless it is an emergency. HMO primarily focuses on wellness and prevention.

The HMO enters into an agreement with health centers, physicians, and specialists to form a network of care providers. These medical professionals and facilities are paid an agreed amount to offer a wide range of services to the HMO subscribers.

How Does The HMO Plan Work?

When you sign up for HMO, you will be required to choose a Primary Care Provider (PCP) from the network of HMO doctors. The physician will be in charge of all your health needs.

If you need to see a specialist, the physician will refer you to one. Without a referral from your PCP, you cannot see a physician under this plan. If you visit a specialist without a clear referral from your PCP, you will need to pay for that service out of pocket.

Certain specialized services such as mammogram and screening do not require referrals. PCPs usually make referrals to specialists who are also within the HMO network. If a subscriber needs emergency care and he or she is out of the coverage of HMO, he or she can access services from a physician that is not within the HMO network. That service will be covered by the HMO.

With HMO, you will not be submitting claims to the company for the services you have received. You should, however, note that when you receive health care services from physicians who do not have a contract with HMO, you will need to pay out of pocket.

Subscribers are expected to pay monthly or yearly premiums to enjoy the coverage. HMO charges low premiums and there are no deductibles. HMO charges an amount known as a copayment for hospital visits, tests, and prescriptions.

The copayments charged are usually $5, $10, and $20 per visit. This makes HMO affordable and you do not need to make several out-of-pocket payments.

When a subscriber’s PCP leaves the HMO network, the subscriber will be notified. The subscriber will then be asked to choose another PCP.
Some HMOs offer Point-of-sale (POS) services for subscribers.

This allows subscribers to access health care out of the HMO network without serving a prior notification to the HMO. Usually, HMO authorizes all services that subscribers receive from out of network health care providers or facilities.

The POS system is different. You may, however, pay higher than you would have paid when you access the service within the HMO network.

What To Consider When You Want to Subscribe to HMO

HMO is an affordable plan that helps people to access health care without making out-of-pocket payments. However, you may be asking yourself if this plan is right for you. Before you subscribe to this plan, ask yourself this question.

  • Are you shopping for rates with lower premiums?
  • Are you looking for a plan without a deductible?
  • Do you need preventive care services such as immunizations?
  • Do you need a personal physician for regular health care?

If your answer is yes, then the HMO plan is good for you.

Cost of HMO Plan

As mentioned earlier, HMO subscribers make monthly or annual payments. HMOs set a limit on out-of-pocket costs and this helps subscribers from making excessive extra costs if they need to make several visits to the hospital.

The limit on annual out-of-pocket payments for 2019 is $6,700.
One thing is that HMO cannot charge more than Medicare charges certain care services including dialysis, chemotherapy, and Skilled Nursing Facility (SNF) care.

However, HMO can charge higher co-pays for certain kinds of medical care services. These services include inpatient hospital care, durable medical equipment (DME), and home health.

HMO is a plan that allows you to access services at lower premiums and you do not have to worry about making excessive unexpected out-of-pocket payments.

However, you must make all inquiries before signing up. Most importantly, you must check if you actually need this kind of plan since it focuses on preventive health care.