A health maintenance organization (HMO) plan is a type of health insurance that is designed to provide comprehensive medical coverage through a network of healthcare providers. HMO plans require members to choose a primary care physician (PCP) who coordinates all their healthcare services. HMO plans are available for individuals, families, and Medicare Advantage enrollees.
How does an HMO plan work?
With an HMO plan, members typically must use healthcare providers and facilities that are part of the HMO’s network. Health plans typically have a tool for searching in-network providers or hospitals (like our find a doctor directory). Services received outside of the network are usually not covered, except in cases of emergency. This structure helps keep costs lower for members and ensures coordinated care. A member’s PCP serves as the main point of contact for all health concerns and manages referrals to specialists.
How much does an HMO cost?
Costs can vary by plan, but HMOs typically have lower monthly premiums than PPOs and EPOs and some have no deductibles. You may have a copay for doctor and specialist visits. For specific cost-sharing information, refer to a plan’s summary of benefits and coverage document. This can be found on a health plan’s website or member portal.
How an HMO plan may fit your needs
An HMO plan can offer several benefits, including:
- Lower premiums: HMO plans often have lower monthly premiums compared to other plan types. That means less money coming out of your paycheck.
- Coordinated care: Your PCP coordinates your care, maintains a full view of your health, and helps prevent gaps in treatment.
- Prevention and wellness: HMOs focus on preventive care and wellness to help improve long-term health goals.
Things to keep in mind about an HMO plan:
- In-network coverage only: Your PCP must be in-network, and you generally need to see in-network doctors for your visits to be covered. If your doctor leaves the network, you will need to find a new in-network doctor.
- Out-of-network costs: Emergency visits are covered, but if you need to visit an out-of-network doctor, you’ll typically need to pay out-of-pocket.
- Referrals: You may need a referral to see specialists or receive certain services as an added measure to support coordinated care. Some Medicare Advantage HMOs do not require referrals.
Is an HMO plan right for me?
An HMO may be a good fit if the health plan’s network includes your PCP, preferred hospitals, and convenient care locations. Its coordinated approach to preventive care and wellness can be especially appealing to those seeking a simpler healthcare experience. Weigh the pros and cons and decide what works best for your situation.
You can enroll in an HMO plan through your employer, a health insurance marketplace, or a Medicare Advantage carrier.
