Health Maintenance Organization (HMO)

What does HMO stand for in healthcare?
In healthcare, HMO is a term that stands for Health Maintenance Organization. 

 

What is a Health Maintenance Organization (HMO)?
Health maintenance organizations originate back to 1973 when President Richard Nixon signed the Health Maintenance Organization Act. As defined by the Health Maintenance Organization Act, an HMO is an organized public or private entity that provides healthcare services to individuals who are members of the entity. In more specific terms, a health maintenance organization (HMO) is a health insurance plan that consists of a network of physicians, hospitals, and healthcare providers that provides insurance coverage to individuals for either a monthly or an annual fee. 

Under a health maintenance organization, healthcare coverage is limited to the physicians, hospitals, and providers under that specific health maintenance organization contract. This means that if you were to go to a physician, hospital, or provider outside of the designated network, your insurance would not cover the full cost of your visit. There are some exceptions to this rule, such as emergency care. Additionally, in order to be covered by a health maintenance organization, you have to live or work within the network’s area. While that may seem limiting, there are other factors to consider that might make you consider subscribing to a health maintenance organization. 

Health maintenance organizations offer lower premiums than other health insurance plans because physicians, hospitals, or providers that enter a health maintenance organization contract are paid a set amount of money for their quality services. HMOs also have low deductibles or no deductibles at all. However, there is a required co-pay for each visit, but they are generally inexpensive. Overall, HMOs are known for their affordability. 

If you do choose to become a member of a health maintenance organization, you will have to find a primary care physician within the chosen network. Typically, an individual will consult the primary care physician for any and all issues with health. However, If a need for services outside of your primary care physician’s expertise arises, they can be refer you to another physician. If you do not receive a referral, the visit will not be covered by the HMO. 

Health maintenance organizations are not for everyone. There are pros and cons to be considered. For example, a clear pro is that healthcare services provided by an HMO are inexpensive. Additionally, you receive quality care and a primary care physician that works to achieve the very best for you. There are also cons to HMOs. One drawback is that your coverage is limited to the network that is contracted by the health maintenance organization – unless you receive a referral from your primary care physician. Another con is that emergencies have to be specific in order to be covered by the insurance. Depending on your needs, values, or opinions, a health maintenance organization may or may not be for you. HMOs are an attractive option for those who love quality care at inexpensive prices. 

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