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HMO - Health Maintenance Organization

HMOs are prepaid health plans that charge a monthly premium. In exchange for the premium, the HMO provides full care for you and your family that includes:

  • Doctor office visits
  • Hospital stays
  • Emergency care
  • Surgery
  • Lab tests
  • X-rays
  • Therapy

With an HMO you can usually only choose from the doctors and hospitals that your HMO has contracts with. An HMO will generally charge a small co-pay for a doctor or hospital visit but overall your medical costs will be lower and more predictable than with other types of health insurance.

HMOs receive the same amount of money whether you are healthy or sick. Since a sick person can cost more money for the insurance company it is in your HMOs best interest for you to stay healthy. Because of this, HMOs usually provide preventative care such as: office visits, immunizations, well-baby checkups, mammograms, and physicals.

PROS

  • Lower health premiums for both the employee and the employer. Because of the lower cost, these plans are very attractive and a significant amount of employees will choose them. Usually there are a wide selection of physicians and hospitals on HMO plans and employees feel that if they are able to get the current amount of health care at a substantially reduced price, then it benefits them.
  • Usually no deductible for the patient. The only thing that is required is the prescribed co-payment for services that may run between $15 and $20 a visit. In addition, the co-payment for outpatient and hospital services is substantially reduced as well in comparison to a regular PPO health plan.

CONS

  • The main disadvantage for HMO plans is the fact that you can only go to a prescribed list of doctors. If your physician is not listed on the plan, then you will have to obtain special permission to pay a higher proportion of the cost of the office visit or you will have to pay for the entire treatment of that physician.
  • Little control in use of specialists in the treatment of patients. For instance if your child had autism and you wanted to take him to his children’s neurologist (something he’s done for numerous years), you would have to contact your primary care physician to get a “referral” for you to bring your son. To many, this may seem ludicrous. If you don’t get a referral (or even if the physician doesn’t get the referral from the insurance company), it is very likely that you will have to be faced with the fact that your son cannot see his doctor at the prescribed time unless you pay for the entire visit. Some HMO's have been accused of putting profits ahead of the clients requirement for treatment
  • If your regular physician drops from the HMO plan, then you will be faced with the prospect of trying to find another physician or pay a higher cost ratio for using the same physician. When a patient has developed a doctor/patient relationship for several years, is this really right for them to be forced to change or be punished?

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