What is an HMO? Is It Right For You?

When comparing HMO insurance to other health insurance plans, the main factors to consider are cost, flexibility and network size.

If you want to focus on preventive care and manage your health affordably, an HMO plan might be right for you. However, if you prefer more flexibility, remember that HMOs have more limits compared to a Preferred Provider Organization (PPO) plan, another common type of health insurance. PPOs usually have higher premiums, but they allow you the flexibility to choose from more providers.

Each HMO is comprised of a network of doctors, walk-in clinics, hospitals, labs, imaging centers and other services so that you have the full spectrum of medical care available. The physicians and other health care providers work together as a team.

If you choose an HMO plan, here are three things to consider:

Each HMO has a network of doctors, clinics, hospitals, labs and imaging services. This gives you many options for medical care. In an HMO, you need to use doctors and hospitals within the network.

HMO plans usually don’t pay for out-of-network care or they pay less. However, there are exceptions for emergencies. In these cases, care is usually covered even if it is outside of the network.

An HMO usually requires you to select a primary care physician (PCP) within its network when you enroll, but you can select a new PCP throughout the year, if needed.

Your primary care physician is often the first doctor you call for medical care, including annual physicals and screenings. You will develop a relationship with your PCP, who will coordinate your care.

“Your PCP will be your main point of contact for all of your medical needs, including your lab tests, treatments, specialist appointments and other care,” Dr. Keswani says. “They get to know you over time and act as the quarterback for your care.” 

When considering an HMO plan, it’s important to evaluate their network of primary care physicians and select one that meets your needs and those of your family in the coming year. Each member of your family will need to select a primary care physician. These providers can be family medicine doctors, internists and pediatricians. Many HMOs permit women to select a gynecologist as their primary care provider.

Usually, preventive care with your primary care physician does not require a co-payment for such things as your annual wellness exam, vaccinations and preventive screenings, such as mammograms and skin cancer screenings.

In an HMO, you will need a referral from your primary care provider to see a specialist, such as a cardiologist, endocrinologist or orthopedist. Your HMO plan must approve the service before it is covered.

If the service is not approved and you still want to see the specialist, you may face high costs. If you choose a doctor who is not in your network, your care will be considered “out of network” and you may have to pay most, or all, of the costs.

Your HMO also must authorize tests, treatments or procedures, such as an MRI, physical therapy or surgery. Services must be provided by a network provider unless they are not available.

There are exceptions for emergencies. In these cases, you can get immediate care without a referral, even from out-of-network providers.

Here are a few more things to keep in mind while you consider your options:

• If you already have a doctor you like, make sure they are in the HMO network. Ask if you can change your primary care physician during the year if desired.
• If you take prescription medications, find out if they are covered by your plan and if a generic version is required.
• If mental health care is important to you, ask about the provider network.
• Understand how to get care if you are traveling and must go to an out-of-network provider.