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When you are determining which health care benefits are best to offer to your employees, there are a few options to choose from. Over the course of the next few weeks, we are going to explore the advantages and disadvantages of each medical benefits solution to help you provide the best group health benefits, meeting both the needs of your organization and those of your employees.
Today, we are exploring the advantages and disadvantages of HMO insurance.
What is an HMO?
Health Maintenance Organizations (HMOs) are a type of managed health care system that was created as a way to decrease costs for healthcare consumers across the country. HMOs place importance on preventative measure, spending money on keeping those enrolled healthy to avoid higher healthcare costs later.
How an HMO works
HMOs are focused on larger-scale businesses who need to offer health insurance to high numbers of employees. HMOs include primary care physicians, specialists, hospitals, clinics and other healthcare facilities. The primary care position refers patients to specialists, and those who belong to an HMO must obtain their care from specific facilities and providers who adhere to the HMO guidelines and restrictions (with the exception for emergency care which can be obtained from any facility).
HMOs receive a set payment for services per patient per time period (typically per month).
Advantages of an HMO
HMOs that include both Medicaid and privately insured patients reduce healthcare costs because of the volume of people covered. Because patients need referrals from their primary care physicians, only medically necessary services are approved, which assists in monitoring and maintaining costs.
For employees, HMOs do require a copay, but these are typically kept to a minimal amount. Many HMOs do not require a deductible, saving those covered hundreds of dollars per year, and because there is a flat fee per person, your employees can rest assured, knowing that monthly payments will not increase depending on use of the healthcare system.
Disadvantages of an HMO
HMOs restrict the selection of a medical providers for participants, which can come as a shock for those who are used to having a choice. As well, as mentioned above, most HMOs require a co-payment for each visit or service, so if employees have a condition that requires several visits to their health care provider, the costs of co-payments can add up quickly. Finally, because specialists are only referred to on an as needed basis, without said referral, the visit is not covered by HMO. The process can be more difficult as each specialist must be within the network, and if a condition is rare, this can be tricky.
HMO insurance provides you and your employees with coverage for health care within a network of medical services for a monthly premium. If you are shopping for health insurance for your organization, consider the above advantages and disadvantages and talk to an employee benefits solutions specialist to explore the right offerings for your company.