Everything You Wanted To Know About Health Maintenance Organizations
People who want to secure their medical coverage may discover several health insurance providers out there in the marketplace, Health Maintenance Organizations (HMO) is one of them. Being an increasingly popular option to many, they provide medical coverage in exchange for a fixed annual or monthly payment. From self-funded health care to the managed healthcare systems – the organization provides several medical-related services to its clients. The organizations have several hospitals, healthcare providers, and doctors under their network, and the clients who want to cover themselves through HMO can’t go outside of that network. As there is a network of physicians or healthcare providers who are under contract with HMO, this restricted coverage helps the clients to pay lower premiums than traditional medical insurance plans. When choosing an individual plan, you must understand the pros and cons of it before opting for your own primary care provider.
How Do HMO Plans Work?
HMO plans are nothing but a kind of managed healthcare insurance plan that offers basic as well as supplemental medical coverage to its subscribers. In many cases, the HMO insurance plans require you to pick a primary care provider, also called PCP. In case of any health related issues, the doctor will be your first point of contact. That specialist physician will operate as a gatekeeper, through whom you will be redirected to other recommended health care facilities.
The insurance plan will cover the visiting charge of that doctor. If that primary care provider refers you to some other individual or places for further medical observation, then that cost will be covered as well by your HMO insurance. The main characteristic of HMO insurance plans is to limit your coverage network, and the cost comparatively goes down than other traditional health insurance plans.
To access medical services, subscribers must pay annual or monthly premium fees. As mentioned earlier, the cost is low if you compare to other general health insurance plans available in the market. This is the reason why so many people nowadays are turning into HMO plans. On the other hand, this limitation to the local healthcare network may cost you a few bucks if you’re out of town and suddenly fall sick. However, the HMOs are bound to pay for medical assistance but initially, you’ll have to spend bucks for some of the payments.
The copayment should be done through co-pays, and after spending a certain amount, you’ll be eligible for deductible plans and your healthcare provider would start paying your costs. The co-pays per service can be as low as $5. Hence, these low-cost payments are the biggest advantages of HMO insurance plans, especially if you’re working with a tight budget.
The Role of the Primary Care Physician or PCP
As discussed earlier, the HMO plan typically requires the clients to choose a primary healthcare provider. The provider can be a general practitioner or specialist doctor, as per your requirements. That guy will be your POC during health-related issues. You can’t bypass the PCP to avail of the HMO benefits.
In case you feel you need more advanced medical care to recover, then you gotta take a referral from that particular individual enlisted as your primary caregiver. Without referrals, your insurer will not cover your further healthcare costs. Other health care plans such as PPO will let you visit other physicians, outside your network of specialists. Your PCP is like the bottleneck of your plan.
Healthcare Outside Your Designated Network
The major downgrade of HMO plans is the restrictions of healthcare networks. Though it’s true that due to this limitation the cost of the premiums becomes low compared with the traditional medical coverage plans, in emergencies it might cost a fortune to move outside the network for specialized treatment. In such situations, flexible plans like preferred provider organization (PPO) or Point-of-Service (POS) could be lifesavers.
Being the most popular healthcare plan in Northern America, the PPO insurance plans have out-of-network plans that allow you to avail of the medical service outside of your network. But watch out for the costs, as the premiums are a bit costly in comparison to HOM plans. The plans generally have deductibles that offer low-cost out-of-network services.
The HMO insurance plans are best for the individuals who want to have the best possible health insurance under a reasonable budget. Not everyone can afford to spend hefty amounts monthly or annually to keep the insurance running for years. Hence, despite the disadvantage of its network restriction, the medical coverages under Health Maintenance Organization work well for those who don’t usually go outside of their network, beyond the preventive care, and need to save money for them and their families.
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