HMO Insurance


Health insurance is complex, and many people may not fully understand their policies.  It's easy to pay for premiums without realizing what will or will not be covered, but this can lead to unpleasant surprises when it comes time to file a claim.  Whether you are currently insured or are shopping for a health insurance plan, it's a good idea to take the time to understand how your insurance works.  This will help you choose a plan that will cover your needs. 

In general, there are three primary types of insurance plans: PPO, POS and HMO plans.  A given insurance company may offer all three types, but you may not have a choice between them if you purchase your insurance through your employer.  Each type of policy has its own pros and cons, and recognizing the differences between them will help you to make the best possible decision for your needs. 

HMO
HMO plans are designed as a partnership between the insurance provider and a network of doctors in order to provide a high standard of care at the lowest possible price.  To this end, the insurance company will actually subsidize a specific healthcare provider, which then in turn provides services for a set rate to all of its insured customers. 

In an HMO plan, you have a designated primary care physician, or PCP.  Any care that you receive at that provider will cost you a predetermined flat fee.  If you require treatment that the primary care doctor cannot provide, he or she will refer you to a specialist.  This specialist will usually be someone within your HMO's network unless there are no qualified specialists available. 

Although the deductible and co-payments in HMO plans are usually very low compared to other types of insurance, HMOs do have some limitations.  Outside of true emergencies, you cannot receive coverage for visits made at any facility outside of your care network.  This means that your out-of-pocket costs can be quite high if you venture outside of your network.  This can be especially problematic in the case of emergency room visits as it's up to the insurer, not you, to decide whether the visit constituted a true emergency. 

Additionally, doctors within an HMO network will tend to provide very conservative treatments.  If you wish for more aggressive or cutting-edge treatments, you may need to be willing to pay for them out of pocket as the insurance will often refuse to cover anything not deemed medically necessary by the PCP. 

Pros:
-- Lowest out-of-pocket costs for care
-- No coinsurance
-- Plans are simple; you deal with a single care provider for everything

Cons:
-- Limited treatment options
-- Difficulty getting referrals out of network
-- Premiums may not be lower than other policies

HMO plans are affordable and valuable in many ways, but they lack flexibility.  They may not be the right choice for all customers, especially those who would prefer more experimental or aggressive treatments.  They're also not the right choice for people who travel frequently as it can be hard to find an HMO anywhere you go.

Copay, Coinsurance, Deductibles

All insurance policies will come with set copays, coinsurance and deductibles.  These figures vary from one company to the next, and these figures will determine the cost of your premiums.  In general, the more you pay out of pocket for care, the less your insurance premiums will cost.  This means that high deductible policies will be cheaper, but medical care itself will cost more out of your pocket.  Balancing these two expenses is the key to finding affordable healthcare. 

A copay is a flat-fee amount that you pay when you seek care at any doctor's office. The amount of your copay will vary depending on the type of care you receive.  For example, the payment for an office visit might be $25, but an emergency room visit might be $100.  The amount of your copay for various services is usually listed on the back of your insurance card. In an HMO, the copay is the only fee you pay.  PPO and POS policies will also require you to pay coinsurance depending on whether your provider is inside or outside of your network. 

Coinsurance is the amount of money you must pay for medical care in addition to your copayment.  It's usually calculated on a percentage of the total bill.  For example, in-network visits might give you a 20% copay while out-of-network visits could be 35%.  In a PPO and POS policy, your coinsurance percentage will be higher for care received at an out-of-network provider.  Once you reach your deductible for the year, you generally will no longer need to pay coinsurance.  At the end of the year, the coinsurance will reset along with your deductible for the new year. 

Policies with high deductibles will cost less than those with lower deductibles.  Your deductible is an annual amount; at the beginning of the next year, it resets and you must resume paying coinsurance until the deductible is met again.  Your deductible is calculated separately from your copays and coinsurance.  A portion of each visit made throughout the year is paid toward the deductible until the deductible figure has been met.  Most insurance companies also offer out-of-pocket maximum figures.  Once that figure is reached, you will no longer pay coinsurance or copays.