HMO or Health Maintenance Organization plans are a form of health insurance plans that are gaining popularity these days. This plan enables one to get cheaper health care in exchange of a monthly fee from a doctor approved by the company you are insured with. In fact the HMO plans are fit for preventive health care rather than the conventional plans where a person gets the benefits of insurance only in case of treatment for a disease or ailment.
Originally most of the people were insured in the indemnity plans. But as the cost of health care grew and the indemnity plans grew costlier, people looked out for cheaper health care plan options. HMO plans were introduced at this moment and the ultimate cost of the insurance plans became easier. Now it became affordable both for individuals as well as for the employers who provide medical insurance to their employees.
HMOs build up a ‘provider network’ by negotiating with various health care providers like doctors and surgeons; physical therapists; hospitals and diagnostic laboratories, etc. An agreement with these professionals is made to provide cheaper health care facilities to the insured. They charge the insured patients cheaper than their normal rates. In return the HMO refers the patients to these facilities within their ‘provider network’. If an insured person visits a doctor or health care facility outside this network, then the HMO does not pay for the treatment or check up.
Once a person becomes insured in this plan, he or she will have to choose a physician from the enlisted ones to act as the primary care physician. It is somewhat like the ‘family physician’ of the earlier times. This doctor is responsible for checking the insured and referring him or her to the specialist. Seeing a specialist without referral disqualifies the insured from getting HMO benefits. Along with a small list of available primary care givers, this is often considered a drawback for the system.
However, the benefit that makes this plan attractive is that it is the cheapest form of health insurance. This is possible because the HMOs are large organizations that can provide easy flow of money to the health care providers without charging the insured heavily.