One of the many difficult decisions you must make as an adult is figuring out health insurance. With options, initials, deductibles, and the rest, it can be an intimidating and often daunting process. Managed healthcare, like with an HMO, has become commonplace over the last 20 years.
In fact, some 70 million Americans currently use some form of an HMO for their healthcare. This might be by choice and might be because it’s what their employer offers. With several different HMO models to choose from, HMOs have become a quality choice.
Are you considering an HMO for your healthcare services? Wondering which model of the HMO would work best for you and your family? Read on to learn more about the HMO models that are available and then the pros and cons of selecting an HMO for your healthcare coverage.
What Are HMOs?
A health maintenance organization or an HMO is one type of managed health care. The common type of healthcare requires its users to get medical services from a network of providers including doctors. healthcare providers, and hospitals. HMOs tend to focus on wellness, prevention, and integrated care.
This network of doctors is significant because your insurance company has already approved them. They have already established rates with the providers for services. They’re called in-network providers. You get asked to see in-network providers.
You’re asked to see in-network providers, your providers know what services the insurer approves and what they will pay. The healthcare is provided in an agreement with the insurance company. They know how much the insurer will pay for the services they provide for you. The provider agrees to provide those services at the pre-established rate.
Types of HMO Models
Now that you understand how HMOs work, let’s take a closer look at some options. There are several different models of HMOs a provider could participate in. The HMO typically has different divisions of the HMO model. Employees of the HMO choose where they fit best.
Here are the different types of HMO models:
- Staff Model
- Group Model
- Open-Panel Model
- Network Model
Keep reading to learn more!
The first type is the staff model. In this model, the staff, like doctors and other healthcare providers, are employees of the HMO. They work in a facility owned by the HMO.
With the staff model, the only patients that are seen by the medical providers are people who are in this HMO. In order for a patient to see one of these doctors, they would need to get signed up for the particular HMO that’s staffing that doctor.
The group model is another type of HMO model. In this type of HMO, the doctor and other healthcare workers are not directly employed by the HMO. Instead, these providers are part of a medical group, often several private practices. The group is hired by the HMO for a set amount of money.
The group of providers then decides how the fees paid by the HMO are divided amongst the providers. The group model is like the staff model though because the only patients who see these doctors and providers are patients who are signed up with the particular HMO.
The open-panel model has some similarities to the group model and some differences too. Like the group model, the HMO would employ a group of physicians who work from their individual private practices.
Some of the practices are like the group model and can only see patients who’ve signed up for the HMO. Others are independent physicians. The doctors in the open-panel model can see patients from the HMO and patients who aren’t a part of the HMO too.
The doctors can make referrals to other doctors both in the HMO network and out of the HMO network. However, the HMO states upfront that if you, as the patient, see an out-of-network doctor, they will cover a smaller amount of the care than if you saw an in-network doctor.
The newest HMOs seem to favor the network model. In the network model, the HMO operates a kind of combination of the group model and the open-panel model.
In the network model, the HMO employs:
- Multi-specialty physician group practices
- Independent practice associations
- Fully independent physicians
Patients are encouraged to see their in-network provider. But they can also get referred to others who’re a part of the network.
HMO Pros and Cons
|HMO Pros||HMO Cons|
|Access to primary care physicians||Limited out-of-network options|
|More cost-effective||More difficult to see a specialist|
|Lower deductibles||Change of doctor|
|Easier claims and billing||Preauthorizations required|
There are a number of reasons to consider signing up for an HMO. Let’s take a closer look at the positives connected to using an HMO for your healthcare.
Access to Primary Care Physicians
One thing you’ll be asked to do when you use an HMO is to sign up for a primary care physician. There are some real advantages to working with a primary care physician for your healthcare. This primary care doctor becomes your first stop for all your healthcare needs.
The advantages of having a primary care doctor are that you really develop a relationship with this doctor. They get to know you and your medical background very well. This primary care doctor helps to guide all your medical care decisions at present and into the future.
This type of patient-focused care is a real selling point for an HMO because of the doctor’s familiarity with you and your medical background.
One of the most obvious selling points to an HMO is the cost. It’s typically more cost-effective for patients than other types of insurance. HMOs are able to keep their costs down by simply limiting care to in-network providers.
The HMO administrators negotiate lower prices with providers. The providers are willing to agree to the lower price point because they know it brings in more patients who are a part of the HMO.
There are some HMO plans that don’t require you to pay a deductible. Many insurance plans require a deductible to get paid by the insured before they begin coverage.
Some HMOs still offer plans without a deductible. Sometimes this means you have a little higher co-pay for each visit. Often HMOs that do have deductibles have smaller ones than other types of insurance.
Easier Claims and Billing
As a patient who’s part of an HMO is saved from endless claims forms. Since the doctors are in-network and prices have been pre-established, most HMOs don’t require patients to complete claims forms.
Likewise, the billing for HMOs is pretty streamlined. The prices have already been negotiated. You, as the patient, know what will be covered ahead of time and at what cost.
There are some who don’t like HMOs for a few reasons. Before signing up for healthcare insurance, it’s always good to consider what might not work for the insurer to see if it’ll be an issue for you. Here are some of the negatives associated with an HMO.
Limited Out-of-Network Options
One of the reasons HMOs can provide such cost-effective insurance is because they limit who you can see. You have access to your local network. You can choose your doctor, hospital, or specialists for local care based on the HMO coverage agreements.
The problem becomes when you are outside of your network and need care. If you see an out-of-network provider, you’re going to pay more out-of-pocket for the care. If you’re a person who travels often or spends extended periods of time in other places, then this could be an issue for you.
The exception to this for most HMOs is if you have a genuine medical emergency and are not near your local network of providers.
More Difficult to See a Specialist
There’s no doubt that seeing a specialist while part of an HMO requires more navigation. You can’t just make an appointment with a specialist on your own.
Before you can see a specialist, you would need to see your primary care physician to get a referral. Your primary care doctor would need to agree to the need to see a specialist and provide the referral for the HMO to cover the cost.
If your primary care doctor won’t provide a referral, you could still opt to see the specialist. Yet, it’s likely you’ll pay out-of-pocket for the visit. Each HMO has varying rules on this, so you’d want to check your plan before opting to see a specialist without a referral from your primary care doctor.
Change of Doctor
Remember, in an HMO, you see a doctor who is part of the HMO network. If you already are seeing a doctor with who you have a relationship, you may be unhappy when you need to switch to a different doctor when signing up for an HMO.
If you continue to see your out-of-network doctor, it’s likely you’ll pay full price out-of-pocket. This is how HMOs keep their rates down by requiring patients to see in-network doctors for coverage.
Your primary care physician can give referrals for certain services. Let’s say you’ve injured your ankle. The ankle doesn’t seem to be healing so the primary care doctor orders an MRI.
In most HMO plans, the insurer would still need to authorize the service before it would get covered. Sometimes this means more wait time and even tussle with the plan to get the authorization in place.
Choose the HMO Model for Your Healthcare Needs
When considering different HMO models, it makes sense to consider what’s available to you. It also makes sense to consider how often you see a doctor under normal circumstances. If you don’t travel often and can find a quality primary care physician in the network, an HMO can be a real cost saver for insurance coverage.
If you’re interested in help deciding on an insurance plan that works for you, we can help. Contact us today to get more information on insurance options that’ll be the best fit for you and your needs.