HMO Plans Explained

Like other managed care plans, Health Management Organizations create savings for their members by working with networks of doctors and hospitals. This lets the HMOs get lower rates on healthcare services — so their members pay much less.

Because the plans have so many members, they enjoy huge buying power with healthcare networks. The HMOs negotiate very competitive prices for services. The doctors, hospitals, and other providers get more business from all the HMO members. The HMOs keep their payouts for claims as low as possible. And the HMO members enjoy low prices for quality healthcare.

A Focus On Staying Healthy

Healthy people spend less on healthcare, right? It’s common sense, and HMOs have turned it into a business model.

People who see a doctor regularly stay healthier than people who don’t. Early detection and treatment usually prevents health problems from turning into full-blown illnesses. It costs you — and your insurer — a lot less to see a doctor and get treatment now than to put it off and spend a week in the hospital later.

That’s why HMOs put so much emphasis on primary care. HMO plans offer the most affordable way to see a doctor. And they extend their low-cost coverage to a wide range of primary services — including prescription drugs, lab tests, maternity care, and sometimes even vision exams.

If you have a chronic illness or pre-existing condition, an HMO plan might still be a good choice. Some plans will let you choose a specialist as your primary care physician, making it easier for you to get care for your condition without constant referrals. And since there are no deductibles or lifetime maximums, your treatment can be more affordable than it would be in other plans.

Limitations Of HMOs

The biggest limitation of HMOs is that you need approval to get treatment above the primary care level. If you need specialist care, you have to see your primary care physician. And care above the primary level may need to be approved by the HMO plan administrators — a condition that many doctors and patients find troubling.

The other major limitation is that care from providers outside the network is not covered at all. Unlike PPO plans, which will cover some of the some of the costs of outside-network care, you must get care within the HMO network to enjoy coverage.

But most people who choose HMO plans don’t find these limitations to be a problem. Most HMO plans have a large network of providers to choose from. And the affordability of HMO programs more than makes up for any inconvenience.

You can find out more about HMO plans by talking to an agent. We can match you with agents in your area, so you can compare free insurance quotes. You’ll get connected with as many as 5 agents, who can answer your questions — and find you the right health plan.