Why You Should Go With HMO Insurance: Costs And Coverage

HMO Insurance Plan

When considering a health insurance plan, it is good to have choices. You should compare the health plans so that you select one based on how affordable it is or on your specific preferences. There are two common types of health insurance plans; the Preferred Provider Organization (PPO) and the Health Maintenance Organization (HMO).

The difference between them includes the ability to see medical specialists, the size of the plan network, out-of-network service coverage, and the cost of the plan. So why should you choose an HMO insurance plan? This article highlights what an HMO insurance plan is, its costs and coverage, the advantages over a PPO plan, and why you should go for it.

How Do HMO Plans Work?

An HMO plan offers a broad range of healthcare services via a network of healthcare providers who agree to supply services to members. If you have an HMO, you are more likely to have coverage for a broader range of preventive health care services than any other plan.

How HMO Plans Work

When you enroll in an HMO plan, you are required to choose a primary care physician (PCP) who will take care of your healthcare needs. You have to obtain a referral from PCP before seeing a specialist. Even though there are some variations, most HMO plans enable members to have lower out-of-pocket healthcare expenditures.

Once you have an HMO plan, you may not need to pay for a deductible before the coverage starts, and the copayments are likely to be minimized. In most instances, you will not have to submit any claims to the insurer. Of note, remember that you may not have coverage for services rendered without proper PCP referrals.

An HMO plan provides you access to specified doctors and hospitals that are within the HMO network.  An HMO network comprises providers who have agreed to offer lower rates for the members while also meeting the needed quality standards.

The following are the key points about HMOs.

  • Some HMO plans may demand that you select a PCP who determines the type of treatment you may require
  • Some HMO plans advocate for a PCP referral for your treatment to be covered when you need tests or when you need to see a specialist
  • An HMO insurance plan has a lower premium but may accompany higher deductibles
  • When you opt to see a doctor outside the HMO network, you are not covered

When Is An HMO Plan Suitable?

An HMO plan is right for if:

  • You need preventive care services, such as when you need to be covered for immunizations and checkups
  • You want a plan that does not require you to pay for a deductible and do not mind having and out-of-pocket limit
  • You are shopping for a lower premium plan

Costs And Coverage

HMO Costs

As per the rules set for HMO plans, they are less expensive compared to other plans which are paid on a monthly basis. This implies that a member of an HMO plan pays less per month for the cover. However, in some instances, HMO plans can come with a high deductible which implies that you may be required to pay more out of pocket when you are receiving medical care.

Taking this into consideration, finding plans with higher deductibles and lower premiums is the best option for those who are young, healthy and rarely see a doctor. Remember that you should be able to afford the full deductible in case of a medical emergency.

HMOs Coverage

The coverage package for HMO plans is comparable to that provided under other health-related insurance plans. All major healthcare insurance plans, such as HMO, provide for the federally directed “10 Essential Health Benefits,” and also provide coverage for some preventive care services at no out-of-pocket cost.

However, HMO plans have some restrictions on the doctor you should see and how the care coordination will be done. The plan requires you to select a primary care physician (PCP), who becomes your primary point of contact whenever you have healthcare issues or concerns. The PCP is required to refer you to a specialist or any other medical service provider and order for laboratory tests from other medical care providers within the specific HMO network when they are needed.

You should select HMO plans since through them you can be referred to the best specialist, as opposed to with other plans. For instance, in PPO plans, you are only required to see in-network specialists among other medical service providers, and you do not have to be referred to your primary doctor.

The prescription drugs cover in HMO plans does not vary much compared to PPO plans. Of note is that all health insurance covers have their formula of covering drugs. If you take the prescription medication regularly, you should ensure that the drugs are covered under the HMO plan you are considering, and also ensure it is affordable.

Advantages Of HMO Plans

Comparison To PPO Plans

To highlight the advantages of HMO plans, there needs to be a comparison. As mentioned earlier, a PPO plan affords greater flexibility to members as it allows you to pick a doctor; a provision that not included in an HMO insurance plan.

A PPO plan, just like an HMO, will also feature network providers. However, they have fewer restrictions since you can see non-network providers. PPO insurers will still cover you even if you see a non-network provider, but it may be at a lower rate.

Here are the main features of a PPO plan:

  • Premiums are usually high, and it is common for deductibles to be included
  • You can choose a non-network provider and doctor and still get covered. However, members enjoy better benefits if they chose to remain in the PPO network.
  • You can see the medical practitioner you like without the need of seeing the PCP first

Advantages

HMO Insurance Plan

HMO insurance plans are generally cheaper and more affordable than PPO plans. The monthly premiums for an HMO plan are lower than that of a PPO plan. In both of the plans, you are required to pay for deductibles. However, PPO plans accompany higher deductibles, but HMO plans have low or no deductibles and generally lower premiums. This makes the HMO insurance plan much better regarding affordability.

There is a good reason younger insurance shoppers choose HMO insurance plans compared to a PPO plan. HMO plans are far cheaper and appealing and cost less regarding monthly premiums. Since an HMO makes the care coordinated, it eliminates the burden of finding a network medical provider or a specialist. Also, this saves a lot of time as all the work is done for you.

In addition, if you have an HMO insurance plan, you do not have to file claims. This is because HMOs restrict your care to the in-network specialists and members. You do not have to file a claim because your insurer pays the healthcare provider directly. This saves you a lot of hassle, unlike PPO plans where you are required to file claims since you receive out-of-network care.

Lastly, even though consumers are less likely to purchase an HMO insurance plan compared to a PPO plan, HMOs receive higher subscriber satisfaction ratings. HMOs cover for emergencies, surgeries, basic preventive care, and treatment from specialists, which is why you should consider them besides their affordability.

Why HMO Insurance Plans Are Becoming Popular

The HMO plans made a comeback in the age of Obamacare. For instance, according to an eHealth Study made in March 2015, during open enrolment, HMOs accounted for approximately 39% of all health insurance plans chosen by consumers. PPOs accounted for about 42%. This implies that HMOs are gaining preference over other plans among the young.

Note that a majority of advantages of HMO insurance plans are based in part on location. This implies that the network you are confined to is based on your location and the availability of in-network providers and specialists.

Since HMOs have undergone decentralization, combined with factors like increased affordability, this has contributed to the increase in using HMOs. HMOs are no longer limited to state boundaries, which significantly improves their relevance and is why you need to consider them over other plans.

Conclusion

We recommend that you have choices when deciding on which health insurance plan best suits your needs. You should compare health plans so that you select one based on how affordable it is, the reason for the plan, and your specific preferences.

You should definitely get an HMO insurance plan if you need preventive care services, want a plan that does not require you to pay for high deductibles, or when you prefer a plan with a lower premium plan.

Additionally, you should go for an HMO insurance plan since it will save you a lot of trouble when looking for a specialist, and you do not have to file for claims, unlike with PPO plans. We hope that after reading his content, you will be convinced of why you should at least consider an HMO insurance plan.

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