Understanding how you can benefit from HMO plans
Wondering what an HMO insurance plan is? Short for Health Maintenance Organization, HMOs are types of plans that allow you to visit a select network of doctors and specialists who work with your health insurance provider. These plans can be great for families looking for an affordable way to maintain their health care expenses.
No matter what type of plan you’re looking for, HealthMarkets can help you find the right one for you and your family.
With over 3,000 licensed agents nationwide, available at your convenience, why search for health insurance on your own? You can learn about your options and enroll in the plan that works for your unique health and budgeting needs. Unlike shopping at a federal or state health exchange, HealthMarkets can provide personalized advice and guide you towards the right health plan.
Features of an HMO Insurance Plan
To understand whether this type of plan will work for you, it’s important to further define HMOs by their key features.
According to Inc. Magazine, “HMOs provide a wide range of comprehensive healthcare services to their members in exchange for a fixed periodic payment. In most cases, participants must select a primary care physician from a list of approved providers, which usually includes internists, pediatricians, and general practitioners. These doctors act as gatekeepers to coordinate all the basic healthcare needs for their patients.”
Generally with HMO plans, it’s important to stay within your provider’s network of doctors in order to keep your out-of-pocket expenses low. Your selected primary care physician can refer to specialists who are within your HMO’s network to ensure you stay covered under your plan.
According to CMS, “HMOs usually limit coverage to care from providers who work for or contract with the HMO. An HMO generally won’t cover or has limited coverage for out-of-network care except in an emergency. If you use a doctor or facility that isn’t in the HMO’s network, you may have to pay the full cost of the services you get.”
Cost of an HMO Insurance Plan
Despite how restrictive HMO plans can be when it comes to choosing your health care provider, they are often the more affordable types of insurance plans available. According to ValuePenguin, the average HMO plan can have a monthly premium of $230—averaging to about $2,764 annually. This is less than the average monthly rate for other types of health plans, including POS, PPO, and EPO.
When you do receive care from an in-network provider, you may be responsible for a copay—or the amount you pay for your doctor visits—each time you receive care. This regular amount can help you better manage your out-of-pocket costs rather than paying towards an annual deductible or coinsurance.
The Difference Between HMO and PPO
As you learn about HMO insurance plans, you may also see the comparison between another common type of health plan: PPO. Short for Preferred Provider Organization, PPOs and HMOs are the two plan types that are more often compared and contrasted with one another.
While both provide health coverage to families and individuals, the difference between HMO and PPO can be as distinct as night and day.
According to WebMD, while HMOs restrict your ability to visit out-of-network providers at the risk of not having coverage, PPOs allow “a moderate amount of freedom to choose your health care providers. You do not have to get a referral from a primary care doctor to see a specialist.”
However, if you do see a doctor or specialist who is out of network, you can expect to pay a higher out-of-pocket expense and fill out more paperwork for your health insurance provider to help with the cost. The freedom to choose multiple doctors and responsibility for the cost of care are other key differences between these two popular plans.
According to NerdWallet, “A person enrolled in a PPO plan isn’t restricted to a single primary care doctor, which also means that he or she can visit specialists without first getting a referral.
You won’t be responsible for paying the entire bill if you receive treatment from a doctor who isn’t in your network, as these services may be partially covered by your PPO provider. However, in-network care will typically cost you much less. This is the PPO provider’s way of encouraging its patients to visit doctors and hospitals in their network.”
However, this freedom to choose does come at a price. As mentioned in the previous section, the average cost of a PPO plan is more expensive, both per month and year, than an HMO plan. PPO plans average at $251 per month, and can total to $3,019 annually.
Other Types of Healthcare Plans
HMO and PPO plans are just some of the many types of plans you may come across in your search for health insurance. POS, EPO, HSA, and HDHP are a few other plans that are similar to the aforementioned plans.
POS, or Point-of-Service is a blend of HMO and PPO plans. Similar to an HMO plan, you are required to choose one in-network primary care physician; yet similar to a PPO, you are able to visit providers out of network with less coverage than you would receive in-network. The specifics of POS insurance plans are illustrated by HealthCoverageGuide.org:
“When patients venture out of the network, they’ll have to pay most of the cost, unless the primary care provider has made a referral to the out-of-network provider, in which case, the medical plan will pick up the tab.”
EPO, or Exclusive Provider Organization is similar to HMO plans, without the need of your primary care physician deciding which specialists you can visit. These plans do require you to stay within your health insurance provider’s network in order to receive coverage for your health care.
NerdWallet explains the similarities between EPOs and HMOs: “EPOs are very restrictive in that you must remain within the network to get care [except in the case of an emergency]. There are also copayments with EPOs, but, like HMOs, they are usually quite small.”
HSA, or Health Savings Account can be considered more as bank accounts than insurance plans. These are tax-deductible plans that cover the healthcare expenses your health insurance provider doesn’t.
According to NerdWallet, “Traditionally, HSAs are coupled to high-deductible health plans, but some new plans under Obamacare [also known as the Affordable Care Act or ACA] offer EPO, HMO, and PPO plans with an HSA option. Much like IRAs, they roll over annually and grow tax-free; there are limitations to how much an individual or employer can contribute in a year. Qualified medical expense withdrawals are also tax-free.”8
HDHP, or High Deductible Health Plans are types of insurance that provide a higher deductible than most other plans. Qualified HDHPs are typically paired with HSA accounts, where pre-taxed money can be set aside to help cover the deductible when you receive health care.
The Huffington Post explains how “it's important to note that the prices you pay while insured under your HDHP are negotiated rates between your insurance company and medical providers. In other words, you'll pay less for services than someone who visits the same doctor without insurance.
The healthcare expenses you incur will go toward your deductible, which you can think of as a ceiling on your healthcare costs. You are responsible for all of your medical expenses until you've reached that ceiling. Then, your insurance will start to pick up a share of the tab.”
HMO, PPO, POS … Which One is Right For You?
With the many pros and cons of these types of health plans, it can require careful research and understanding of your own needs to choose the right plan. It’s important to understand you and your family’s unique medical and financial situation before beginning your search for health insurance.
Does your family require more medical attention that goes beyond annual exams and checkups? Do you need help paying out-of-pocket costs for chronic diseases or physical therapy treatments?
NerdWallet gives a great summary of the different types of plans that are ideal for certain family scenarios:
- “HMOs are ideal for individuals who visit the doctor infrequently and who seek health services at an overall less cost.”
- “A PPO plan is ideal for those who need (or want) more provider options, whether due to living in a remote area or having to see different specialists.”
- “EPOs are great for individuals who want a lower premium and who hate waiting for referrals to see specialists.”
- “HSAs are for individuals who want the flexibility of a traditional plan, while allowing them to be financially vigilant of excess. They are also great for those who worry about medical expenses after retirement and want to plan ahead.”
With the restrictions and flexibility some of these plans offer, it’s important to consider both the monthly premium rates as well as the deductible, copayments, and coinsurance you may be responsible for with each type of plan.
If you’re looking for an HMO plan or you’re curious about your options, contact HealthMarkets today. With over 180 insurance providers nationwide, we can compare your health and budget needs to policies available in your area to find the right one for you.
At HealthMarkets, you’re not just dealing with a website. You’ll work with knowledgeable agents who are dedicated to helping families like yours find the health plan that works for them. We can help you identify key components of the health insurance market, including supplementals and Medicare.
With our portfolio of products and experience, we’re confident we can help find the plan for you. Want to know what’s an HMO insurance plan and how it can help your family? Contact us online by getting a free quote, in person with one our local, licensed agents, or by phone at (800) 360-1402.
“Health Maintenance Organizations and Preferred Provider Organizations — Inc.” 2015.
“What You Should Know About Provider Networks — CMS” 2015.
“Average Cost Of Health Insurance (2015) — ValuePenguin.” 2015.
“4 Types of Health Plans: How They Compare — WebMD” 2015.
"HMO vs. PPO Health Insurance Plans: Selecting the Right Plan for Your Needs — NerdWallet” 2014.
"Plan Characteristics and Types — HealthCoverageGuide.org” 2015.
“Types of Health Insurance: HMO, PPO, EPO, HSA — NerdWallet” 2013.
“An HDHP Is My Only Option Next Year — How Should I Prepare? — Huffington Post” 2015.