Managed Care / Health Maintenance Organizations (HMOs)

With an HMO plan, you receive a range of health benefits in exchange for a fixed monthly premium.

The range of health benefits varies, so it is important to compare different HMO plans. Some health care services are only covered on a limited basis; some are not covered at all.

Generally, you don't have to pay a deductible in an HMO. However, most plans require that you pay a small fee, called co-pay, of about $10-20 each time you a doctor or a medical facility.

With an HMO, you have to select a primary care physician from the plan’s list. This is the doctor who will manage all of your health care and he/she will approve further treatment and refer you to a specialist when needed. Generally, the choice of specialists and hospitals is limited to the ones that have agreements with the HMO. If you go to doctors who are not in the HMO, you’ll have to pay the full cost of the care, except for emergency situations.

There are two main types of HMO:

• Group (or Staff) Model HMOs: HMOs, where doctors are employees of the organization and you visit them at a central medical facility.
• Individual Practice Associations (IPAs): HMOs that sign contracts with physicians with private practices, outside the HMO.

Advantages of the HMOs:

• Relatively low and predictable costs: except for the monthly premium, there are few other costs involved when using network providers.
• Little paperwork: you are not required to fill out claim forms for doctor visits or hospital stays.
• Extensive preventive care services: as the HMO charges flat upfront fees, they are interested to make sure your medical problems do not become serious.

Disadvantages of the HMOs:

• Out-of-network medical services are not covered, except for emergencies, and situations that qualify as an emergency are strictly limited.
• You may have to wait longer for a visit to a doctor than you would with a fee-for-service plan.
• To receive specialized care, you have to first obtain referral from your primary care physician.
  

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