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An HMO, or health maintenance organization, health plan is a type of health insurance plan in which customers pay a fixed monthly fee, as well as co-payments for the services provided by healthcare professionals and companies. Physicians and other healthcare providers receive a fixed fee per patient from the health insurance company. HMO health plans usually only cover services provided within a network of contracted hospitals, doctors, clinics, therapists, and dentists.
HMO health plans are a popular option in the health insurance industry. Many employers and government entities use HMO plans for the health coverage of employees and people who qualify for certain types of government subsidized health insurance, such as Medicare in the United States. In some American states, more than half of all people covered by health insurance are enrolled in an HMO health plan.
The overall goal of a health maintenance organization is to keep costs low to everyone involved. HMO health plans do not require deductibles, which can save patients a great deal of money. Fixed fees and co-payments, plus monthly fees for the insurance, are generally the only financial requirements of an HMO. Because of their low costs, health maintenance organizations often provide a great deal of business to the health care facilities and businesses they contract with. HMO health plans can be a win-win for patients and healthcare providers when it comes to cost savings.
There are some requirements of HMO plans, however, that can be controversial and unappealing to patients. HMO customers must choose a primary care physician who is part of the HMO network. This can be problematic if a person must switch doctors or specialists, especially for people with ongoing health conditions. Should other healthcare services be needed, such as a visit to a specialist, the primary care physician must make the referral for the patient in order for the service to be covered by the HMO health insurance.
Furthermore, to keep costs low, HMO health plans will often only pay for specific types of procedures, services, and medications. Some patients and physicians therefore find themselves in a position where they need to appeal the decisions of an HMO and ask for additional or increased insurance coverage. This is not uncommon, and it is possible that the HMO will agree to cover additional services if they are deemed medically necessary.
Though health maintenance organizations are known for only covering services within a healthcare network, some exceptions are allowed in emergency situations. Anyone who is enrolled in an HMO should have a clear understanding of what is and is not covered, and in what situations exceptions are allowed. HMO customers are usually given a book or website access that lists all covered services, facilities, hospitals, physicians, and therapists. Out of network services and fees should be defined and listed as well.
Because they are so cost effective, HMO health plans continue to be a growing trend in the health insurance industry. They are also very appealing to governments that fund health insurance for some citizens. Health maintenance organizations are popular in a number of countries, including the United States and Switzerland.