HMO Health Insurance Plans
An HMO, or Health Maintenance Organization, is a type of health insurance plan. HMO plans are commonly provided by an employer, and is the most popular type of coverage. Employers typically provide all, or some, of the benefit premiums as a benefit to employees. This fact makes HMOs a popular option for many, but you should also know that HMO plans have limitations that other traditional coverage types do not have.
In the early days, HMO plans were offered by the employer directly; allowing employers the ability to provide medical coverage for free or at a reduced cost, as long as treatment policies and guidelines were followed. HMO plans started showing up in the early 1900's. They did well for several decades, until 1973 when the U.S. Department of Health and Human Services passed the HMO Act which gave official recognition to these types of healthcare insurance options.
HMO plans are usually less expensive than other forms of health insurance. There are two reasons why these plans are less expensive: first, because HMO plans have established contracts with approved healthcare official who have an agreement to provide services at a lower cost for patients who are covered by the HMO. This agreement between caregivers and HMO providers allows tighter controls over fees and surcharges and keeps the rates lower than those of other plans.
A second reason is that HMOs are more streamlined. Any treatments, not approved as being necessary, have been removed from coverage. This allows the medical healthcare coverage to be applied in a way that is more effective for long term management and for a larger, more diverse group of people. HMO providers are able to manage overhead more effectively by having established the covered treatments and procedures and by providing a very specific listing of care providers. This keeps overhead expenses under control for HMO companies.
Certain HMO plans make allowances for customers to keep using their family doctors, under certain conditions. It usually provides coverage for treatment up to the amount that it would cover for physicians that are members of the HMO. This leaves the insured party responsible for any costs that exceed that amount; from a few dollars to hundreds or even thousands of dollars, depending upon the precipitating conditions. Prior to joining an HMO, it is advisable to talk with your regular physician to find out what plans they are members of. If it is a viable option for you to go with that HMO, it could result in you saving a lot of money over time.