HMO - Health Maintenance Organization
UNDERSTANDING is the key to choosing the right plan for
you!
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HMO stands for a health maintenance organization which
provides “managed care” in return for a monthly or quarterly premium. You pay the fee required by your specific plan and in exchange offered a
range of health benefits that cover from preventive care and education to physician care, surgery and hospitalization.
With an HMO your healthcare is “managed” by your primary
care physician, usually a general practitioner. For the most part you must
receive a referral from your physician before visiting a specialist outside the
provider network. There are some exceptions, such as when you are
traveling, you are limited to seeking care completely within the network of
providers, doctors, hospitals and labs with which your HMO has negotiated with.
Contracting discounts from a network of providers is one of the
primary ways a HMO maintains cost effectiveness, so the plan only works when you
stay within the network. In addition to your premium, an HMO generally charges a
co-payment. One of the features offered by an HMO is that they can deliver care
directly to patients. Patients visit an HMO’s medical facility to see their
physicians.
How did the HMO come
about? Well in the early 1970's Health Maintenance Organizations were initiated in an attempt to control the rapidly increasing costs of health care.
The federal government provided grants and loan guarantees and then employers of 25 or more employees were required to provide HMO coverage for their employees.
Once again due to the nature of the agreement as long as the primary care
physician was visited this worked well for the individuals having this type of
coverage. If a freedom of choice was needed a PPO instead allowed the
flexibility desired.
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