What is an HMO?

Posted July 9 2020

Doctor's office clerk explaining insurance benefits to customer, patientA Health Maintenance Organization (HMO) is a type of health insurance plan that operates with a network of participating providers such as primary care physicians (PCP), doctors, and hospitals. Typically, there is no coverage offered if you use a provider that is outside of the network.

As opposed to an HMO, a Preferred Provider Organization (PPO) is a type of health insurance plan that operates with a network of participating providers, much like an HMO, however there is still coverage, albeit limited, offered if you use a provider outside of the network.

What is the difference between an HMO and a PPO?

The main difference between an HMO and a PPO is that an HMO is more limiting in terms of having access to see certain providers. Yes, you always have to freedom to see whoever you want, but with an HMO, there is typically little to no coverage if that provider is outside of your network.

What are the benefits of an HMO?

· Lower premiums

· Lower Out-of-Pocket Costs

· Claims process is easier since all claims are in network

· Having a primary care physician lead your overall care

Who does an HMO work best for?

While HMOs are considered to be a less expensive option, according to the Kaiser Family Foundation’s 2019 Health Benefits Survey, “HMOs only account for 19% of covered workers in 2019.” Even though they are not the most popular option, HMOs are great options for those that do not require extensive medical care, those that are younger, and those that are overall very healthy benefit more. Partly because most young people do not require to see a doctor or a specialist as often as someone who is elderly or not in the best health, therefore they do not require as much thought or care for who they are seeing or being seen by, and benefit from the lower cost associated with the plan.

Selecting the right health insurance plan for you or your employees can be a difficult task, but the experienced insurance brokers at MHG are glad to help you sort through the terminology and key features to determine the best health insurance plan for your situation. Our Insurance Specialists will help you assemble a complete insurance offering that includes health insurance, gap insurance coverage, life insurance, disability, and more. Call us today at 954-828-1819 or visit us online at mhginsurance.com for help in selecting the ideal health insurance plan for you and/or your employees.