TYPES OF HMO’s
As the name implies, an HMO’s primary goal is to keep its members healthy. Your HMO would rather spend a small amount of money upfront to prevent an illness than a lot of money later to treat it.
If you already have a chronic condition, your HMO will try to manage that condition to keep you as healthy as possible.
There are three main types of HMOs.
- Staff model:Healthcare professionals are employed by the HMO and only see patients enrolled with the HMO.
- Group model: Healthcare professionals are not directly employed by the HMO but have contracts to offer care at a fixed rate. The group physicians only see patients enrolled with the HMO.
- Network model: Healthcare professionals are not directly employed by the HMO, and the HMO has contracts with multiple physician groups. Healthcare professionals see patients with the HMO as well as patients with other types of insurance.
DIFFERENCES BETWEEN HMO AND OTHER INSURANCE
An HMO is a type of managed care health insurance, which means that the health insurance company has agreements with providers for the cost of care. (Managed care includes virtually all private coverage.
The type of options you’re likely to have will depend on where you live and how you get your health insurance. For example, if you are selecting health insurance through your employer, there may only be one or two options, or there may be multiple. If you are purchasing insurance on your own, the options vary.
HMO vs. PPO: Which Is Better?
Whether or not it is better to have an HMO or PPO depends on several factors, including the general health of the plan’s members, the desired amount of flexibility in choosing doctors and healthcare facilities, and budget constraints.
A Preferred Provider Organization (PPO) offers more flexibility in doctors and facilities than HMOs, because members have more options. Members don’t need a primary care physician’s referral to visit a specialist and have the option to visit out-of-network healthcare providers at a higher out-of-pocket cost. Also, PPOs generally come with higher co-payments and/or deductibles.
HMO vs. PPO
PPO stands for preferred provider organization. These tend to be more expensive but allow more choices than HMOs. PPOs charge different rates based on in-network or out-of-network healthcare providers and facilities, which means you still have some coverage if you go out-of-network. You don’t need to go through a primary care physician.
HMO vs. EPO
Exclusive provider organizations (EPOs) are another type of health insurance. Similar to an HMO, an EPO only covers in-network care. It may or may not require referrals from a primary care provider.
HMO vs. Point-of-Service
Point of service (POS) is a combination of an HMO and PPO. This type of plan means that you can decide to stay in-network and have care managed by a primary care provider or go out-of-network with higher costs but still some coverage.
Dropping HMO Numbers
According to the Kaiser Family Foundation’s annual health benefits survey, 12% of employees with employer-sponsored health benefits had HMO coverage as of 2022, versus 49% of employees covered by PPOs.
No managed care health plan will pay for care that isn’t medically necessary. All managed care plans have guidelines in place to help them figure out what care is medically necessary, and what isn’t.