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Health Maintenance Organizations for Health Insurance

By Compuquotes Team on March 27th, 2008
Health Insurance

Health Maintenance Organizations (HMOs) are organizations that provide health insurance to large groups of people, such as employer groups (in fact, most people with HMO health insurance have obtained it via their employer). HMOs typically offer the most well-known and commonly-used managed care health plans of those available in the United States.

  • The Basics of HMOs

HMO plans are prepaid, as are many other types of health insurance. Users pay a monthly fee, and are covered for all of their medical costs. However, this is on the proviso that all of a user's health visits are made to doctors and specialists that are on the HMO's list of preferred providers (also called a network). Any visits to non-network health care professionals are not paid for by the insurance.

Under most HMO plans, each user must select a primary care doctor from a list of network doctors. A primary care doctor is more or less the same as a family doctor. You can visit your primary care doctor as often as needed, with no charge. If specialist consultation is needed, your primary care doctor can refer you to a specialist in the HMO network.

Note that if you visit a doctor or specialist that isn't part of your HMO network, the costs of those visits are not covered by the insurance. In addition, if you visit a specialist without a referral from your primary care doctor, that specialist visit is typically not covered by the insurance either.

  • What does an HMO Cover?

Most HMO plans cover some or all of the following (not all plans will include emergency and prescription services, for example):

  • Visits to your primary care doctor
  • Specialist visits (as long as you received a referral from your primary care doctor)
  • Diagnostic laboratory services (with referral)
  • Hospital services (including diagnostic procedures carried out in a hospital)
  • Emergency services (some plans cover emergency services from both network and non-network providers)
  • Prescriptions

Most HMO plans don't cover ´┐Żalternative' treatments such as homeopathy, acupuncture and aromatherapy. In addition, elective cosmetic surgery and routine dental work are not usually covered by these types of plans. However, each plan is different, and if you already have an HMO health insurance plan, it's best find out exactly what you're covered for.

  • Who should choose an HMO Plan?

Health Maintenance Organizations typically offer their insurance only to employer groups, meaning that families and individuals can only obtain such insurance through their place of work. The most significant advantage of these plans is their cost. HMO plans tend to be the cheapest available, because HMOs deal with a very large volume of customers and healthcare professionals.

HMO insurance plans can be a good option for an individual or family who does not have specialized medical needs that the plan does not cover. If a member of your family must frequently visit a non-network specialist, for example, the costs will not be covered by the insurance. In these situations another type of health insurance that does cover those visits will likely serve you much better.

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