What Is An Hmo?
What should you know about an HMO before you become a member? Why are these things important?
HMO stands for 'Health Maintenance Organization'. It is one of a number of different methods of health care protection. Some other kinds are indemnity insurance and/or a Preferred Provider Organization (PPO).
Indemnity insurance generally has a set list of covered items and limitations, usually has a deductible and pays a co-insurance (for example, it might pay 80% and you pay 20% of allowable charges). It might also have a PPO component, which means that you are free to see any health provider you choose, but if you see a preferred provider, you will receive better benefits. Some plans even penalize for not seeing a preferred provider.
An HMO is strictly about seeing providers of their choice not yours.
Normally, the way it works is that you have a primary care physician whom you see first. This doctor will attempt to treat you to the extent that he can. If he determines you need treatment beyond his capability, he will send you to a specialist. Even if you know up front that you need a specialist, the primary care physician must first see you.
The downside of this arrangement is that you can't select your own doctor. The upside is that you will pay less for the service. Usually a co-pay at the time of the visit of $10 or $15 (depending on your plan) and that's it. No bills to file, no deducible, no other payment.
Before you decide to join an HMO, ask to see a list of hospitals and doctors who participate. If the ones you already use are listed, there's good reason to join; if not, are you ready to start over with a new physician?
Something else to consider is that HMOs have come under fire in recent years for restricting primary care physicians from sending you on to a specialist. This, of course, is done in an effort to keep costs down. It depends largely on how the doctor is paid. Some receive a monthly fee per patient with the cost of tests and other services included in that fee. Those will do as little extra as possible. Those who are paid a regular salary have no incentive to deny services. The advice here is find out how your HMO doctor is paid.
In the end, the best approach is to compare (if you have a choice) different plans to determine which is best for. Read all of the literature and get answers to things you don't understand.