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A Health Maintenance Organization, or HMO, is an agreement structured for the supply of medical services to employees at a fixed cost, usually referred to as a co-payment. To the consumer, a Health Maintenance Organization has the look and feel of prepaid medical insurance. HMOs offer a wide range of services to the patient, which usually extend well beyond medical care into areas that are considered preventative care or wellness programs.
With a health maintenance organization, the employee chooses a primary care physician that is responsible for providing medical care, preventative programs, and specialist referrals. Since care and referrals occur within the HMO's network, there is very little paperwork for the patient to fill out.
If you belong to a health maintenance organization and seek medical assistance from providers without a referral, or go out of the network of physicians and hospitals, it is very likely that you will have to pay all of those expenses out-of-pocket.
Since the HMO offers less out-of-network flexibility relative to a preferred provider organization (PPO) or a point of service (POS) medical plan, the premiums are relatively low. The network structure allows the organization to aggressively manage costs and pass those costs on to the employer and employee. |
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