HMOs are one of the most commonly chosen health insurance options — and for good reason. Here’s what makes them such a popular choice, and what you need to know before choosing one for yourself.
What Is an HMO?
HMO stands for health maintenance organization. These plans cover care at specific price points from within a network of doctors. Because doctors in this network have agreed to accept certain payment for their care, your health costs will remain pretty stable within an HMO.
Along with this cost stability, HMOs are usually one of the least expensive health plan options. An HMO only covers doctors in its network, which means you’re on your own for out-of-network expenses other than emergency care. But it also means that these plans are able to streamline their services and keep out-of-pocket costs relatively low.
What Else Do I Need to Know?
When you sign up for an HMO, you’ll select a primary care physician (PCP). This is the main doctor you’ll see when you need an annual checkup or that weird bump starts to look suspicious. They’ll use your health information to assign prescriptions and treatment plans (or, if everything looks good, they’ll probably at least offer you a lollipop). They’ll also have excellent resources to connect you to any specialists you may need, but take note — unlike with a PPO, in most cases your PCP has to refer you to a specialist if you want your care to be covered.
If you and your family have reasonably low health care needs and don’t plan on making any impromptu specialist visits in the near future, an HMO plan can be a smart way to make sure you’re covered. It won’t always offer you as much flexibility as other plans, but when you need it, you can trust it to make reliable and affordable care a reality.