Even prior to the passage of the Affordable Care Act (ACA), or Obamacare, most people were aware of the fact that both HMO and PPO health insurance plans existed. Anyone who had insurance through a job or a private insurance provider probably had to choose between these two options at some point.
Of course, this doesn’t necessarily mean that you understand what an HMO is or why it might be a better or worse option than a PPO plan, for example. In addition, you may have questions about the availability of HMO plans through Obamacare.
Here is some information about what HMO health insurance is and whether or not it’s the right option for you and your family when selecting health insurance coverage.
What is HMO?
HMO stands for Health Maintenance Organization. The “O”, or Organization aspect of this type of health plan, indicates a network of approved providers that members can choose from in order to take advantage of services that are covered by the policy.
With an HMO you’ll generally be required to start by selecting a primary care physician (PCP). In most cases, you’ll see this physician first to receive diagnosis and treatment or referrals to other healthcare specialists. This professional will be responsible for coordinating your health care.
From there you will have to operate within your approved network of healthcare providers and facilities (including pharmacies) if you want to receive coverage under your policy. In other words, seeing doctors outside your network will result in having to pay out-of-pocket for services.
HMOs offer many benefits, most notably lower costs than some other types of insurance policies (such as PPOs). Because members are limited to a network of approved healthcare providers, insurance providers can lower premiums and other out-of-pocket expenses.
In addition, some HMOs have procedures in place to ensure that you have access to local doctors. If you are in need of a primary physician or specialist and none is provided by the network within a certain radius (say 30 miles), you may be able to recommend a preferred provider that is not yet in the network for approval and coverage, although this depends on both the doctor and the insurance provider. In most cases, you will find appropriate options already in your network.
HMO and Obamacare
Under Obamacare, you’ll have access to several different tiers of plans (Bronze, Silver, Gold, and Platinum), all providing different options at different costs. Within these tiers you may have the option to choose between HMO, PPO, and possibly other network types.
These plans are provided by health insurance companies working within the ACA healthcare marketplace, so all should meet standards for minimum essential coverage as required by ACA regulations. You simply have to choose the tier and policy that works best for your needs and your budget.