Is An HMO Right For You?

Insurance Plans

Picking an insurance plan from year to year can feel like sorting through a full alphabet soup of acronyms. After a while, it can be hard to tell the difference between your HDHPs and your PPOs.

A plan that’s been out of the spotlight for some time is the HMO, which stands for Health Maintenance Organization. Like any health plan, it has its advantages and disadvantages. Knowing those can help you make a more informed decision regarding whether an HMO is the best plan for you and your family.

HMOs operate on a network system, which means an HMO gives you access to a group of providers (doctors, hospitals, etc.) that has agreed on certain pricing for members. This is one of the HMO’s greatest advantages: it is generally an inexpensive plan with low monthly premiums and out-of-pocket costs that focuses on preventive health, like annual checkups.

However, most HMOs will only cover visits to in-network providers, with the exception of emergency care. This means that if you already have a primary care physician (PCP) or other doctor who is not in the network, your visits will not be covered at all and you will be responsible for the entire cost. Similarly, many HMOs require you to select an in-network PCP to coordinate all your other care through. For instance, if you need see a specialist, your PCP will likely have to provide you with a referral to another in-network provider. There are also often other restrictions on coverage – the plan may only cover a certain number of visits or tests.

While HMOs are generally inexpensive plans, they contain many restrictions on care. If you are healthy, only see the doctor once or twice a year, and don’t foresee any major health complications, this may be a good choice for you. If you have any chronic health conditions, need specialist care, or see a doctor regularly, you may be better off choosing a plan that offers more flexibility.

RESOURCES:

Health Maintenance Organization (HMO) – HealthCare.gov Glossary | HealthCare.gov
Health Maintenance Organization (HMO) « Welcome to the Home of CT Health Channel
PPO vs. HMO Insurance: What’s the Difference? | Medical Mutual (medmutual.com)