A Health Maintenance Organization (HMO)
A Health Maintenance Organization (HMO) is an insurance plan that provides integrated care with a primary focus on disease prevention and wellness promotion. This type of insurance coverage restricts the number of areas covered by doctors who only work for or under contract with the HMO (DeNavas-Walt, Proctor, & Smith, 2011). Unless in the case of an emergency, the insurance policy does not cover out-of-network care. Furthermore, in order to be eligible for insurance coverage, the beneficiary must work or reside in its service region. The Health Maintenance Organization network is formed by contracting primary care physicians such as the family doctors, specialists such as cardiologists, neurologists and clinical facilities such as speciality clinics and hospitals. The HMO pays the health care providers within the network for the health care services provided to the HMO subscribers. For the insured, they pay premiums for them to be granted access to the health care contract in the network at no cost. In the event the subscriber access care outside the HMO network, they pay for the services received.
The health insurance and contracted providers
The health insurance provides both the basic and the supplemental health care to the subscribers (Gupta, Parente, & Sanyal, 2012). The organizations enter into a contract with primary care physicians, specialists and clinical facilities creating a network of health care providers who then enter into an agreement with the HMO (Fiscella & Franks, 2005). The subscribers often pay a monthly or annual premium to enable access to health care which is limited to the contracted medical care providers. As such, the subscribers access health care only from the physicians under the HMO contract; however, other services outside the network can be obtained (Brockett, Cooper, Golden, Rousseau, & Wang, 2014). They include the emergency care services as well as the dialysis services. For the insured to be eligible for this type of insurance cover, they may be required to live or work in the plan area of the network.
Premiums and copayment fees
The HMO plan requires that the subscribers pay for monthly or annual premiums which are lower compared to other insurance covers (DeNavas-Walt et al., 2011). This cover does not include any monthly deductions but instead charges the copayment fee for each clinical visits or prescriptions. The payments are as low as $5-$20 per visit, and this reduces the out of pocket expenses, and therefore, it becomes the choice for the majority of the families and employers (Fiscella & Franks, 2015). The premiums are covered adequately by the employer. However, the subscriber pays for the copayments any time they access health care.
Primary Care Physician (PCP) and specialty care
In this type of insurance cover, the insured is supposed to choose a primary care physician (PCP) form the HMO network plan. As such, the PCP provides health care at the first point in case of any health care problem. Therefore they PCP then refers the insured to a specialist if need be. However, in some circumstances, access to specialized care may be necessary for particular health care needs. In the event a PCP leaves the HMO network, the insured is informed for the purposes of choosing another one. Concurrently, the PCP is responsible for managing all the health care needs of the insured.
Benefits and limitations of HMO plan
Some benefits are associated with HMO plan in that, it is cost friendly since the insured pays only monthly premiums and copayments during every visit. In addition, they choose a PCP who is responsible for providing are and refers the insured in case of need arises. However, as compared to other health insurance cover, the HMO requires the insured to only access care from within the HMO coverage and the event care is sought from outside the contract, they are required to pay for the services. In addition, one can access care only from a specified coverage.
References
Brockett, P. L., Cooper, W. W., Golden, L. L., Rousseau, J. J., & Wang, Y. (2004). A Comparison of HMO Efficiencies as a Function of Provider Autonomy. Journal of Risk an Insurance Insurance, 71(1), 1–19. https://doi.org/10.1111/j.0022-4367.2004.00076.x
DeNavas-Walt, C., Proctor, B., & Smith, J. (2011). Health Insurance Coverage in the United States: 2010. Health (San Francisco). Retrieved from http://www.census.gov/prod/2011pubs/p60-239.pdf
Fiscella, K., & Franks, P. (2005). Is patient HMO insurance or physician HMO participation related to racial disparities in primary care? American Journal of Managed Care, 11(6), 397–402.
Gupta, A., Parente, S. T., & Sanyal, P. (2012). Competitive bidding for health insurance contracts: Lessons from the online HMO auctions. International Journal of Health Care Finance and Economics, 12(4), 303–322. https://doi.org/10.1007/s10754-012-9118-x
