What Is An HMO?

When we start working with a consumer to try and find the best insurance option for them the question “What is an HMO?” always seems to come up.

HMO stands for Health Maintenance Organization.  So what does this mean exactly?

In an HMO you have a specific network of doctors, like many network types, but unlike networks such as a PPO, you may only go to network providers.  If you go to a doctor that is not within the HMO network you will be responsible to pay all of the costs incurred out of pocket. There are some exceptions to this rule such as emergencies.

Also, in an HMO, you must select a primary care physician. Now, it is recommended that everyone select a primary care physician (PCP) regardless of the type of insurance that they have. This is just good practice for your healthcare to have a single point of contact that is your first line of defense. However, with an HMO, the PCP acts as a gatekeeper. What does that mean? The PCP in an HMO is the only one, in most cases, that can refer you to a specialist. You cannot just decide to go see a specialist for health concerns.

After passage of the Affordable Care Act, many health insurance companies now only offer HMO plans on the Marketplace at healthcare.gov. This means less choice of doctors but potentially less costly plans.