Related Topics Plan Characteristics and Types Cost-Sharing

In a very general sense, HMOs offer predictable cost-sharing and administrative simplicity for patients. These features come with fairly restrictive rules about which providers patients may see. Participants are entitled to doctor visits, preventive care and medical treatment from providers who are in the HMO’s network. In addition to the monthly premium (which may be shared by the employer and employee), participants usually need to pay a small fee at the time of service called a copay (often in the range of $10 to $30), while the HMO covers 100% of the services provided. Most HMOs use capitation arrangements to reimburse physicians.

HMOs typically require patients to select a “primary care physician” who can refer patients to specialists, also within the HMO’s network. HMOs often won’t pay for medical care that wasn’t referred by the primary care physician (some exceptions include emergency services or preventive gynecological exams). They may also require prior authorization before elective hospitalizations or require referrals from primary care physicians before seeing certain specialists.

Other documents in the Coverage Types section:

• Alternatives to Offering Group Coverage
• Group Coverage
• Health Maintenance Organizations (HMOs)
• Health Savings Accounts (HSAs)
• Individual Coverage
• Plan Characteristics and Types
• Point-of-Service Plan (POS)
• Preferred Provider Organizations (PPOs)
• Public or Subsidized Health Insurance
• Tiered Hospital Benefits
• Health Reimbursement Arrangements
• Plans Offered Under the Health Insurance Exchanges