Understanding HMO Health Insurance Policies
Let’s face it, most people aren’t health insurance experts. More than that, nobody wants to spend hours researching the different types of health benefit plans and learn healthcare terminology. That’s why we’ve created this simple guide to understanding an HMO, which will help you to decide if an HMO health insurance policy is right for you.
Instead of simply listing healthcare insurance definitions, we’ll run you through a scenario.
If you have an HMO, you’ll see the word “provider” all over your policy. A provider is simply the health care professional and or the facility, such as a hospital or outpatient facility, etc.
Look for “in-network” providers, which are the listed health care professionals who have previously agreed, by way of contract, to provide healthcare for a network of policyholders. A policyholder is also known as a member. When members (policyholders) use a provider not contracted by the insurance company, it is considered to be“out-of-network.”
HMO stands for “Health Maintenance Organization”
Here’s an example of how an HMO works…
Ashley is 45 years old and has an HMO where she selected a family doctor when she enrolled. This doctor is called a primary care physician or a “PCP.” A PCP is a physician who provides both the initial care for a person with an undiagnosed illness as well as continuing care of other medical concerns and conditions.
Ashley made an appointment with her PCP when she noticed that her heart was beating rapidly on a continuous basis. Her PCP issued her an electronic referral, which is an authorization to see a specialist. In this case, the specialist is a cardiologist.
When Ashley visited the cardiologist’s office, she pays a copay, which is a flat fee you pay when you see a doctor or receive other medical services. Your copay amount will depend on your plan.
Ashley’s cardiologist determined that she needs to go on a particular heart medication. If this medication requires a prior authorization (typical requirement for prescription drugs), then she’ll need to get approval from her health insurance plan before she receives the medication.
She may also need a precertification (typicalfor medical services) prior to certain tests and medical procedures. This is also known as pre-approval.
These are the basics of how an HMO insurance policy works.
Note: This article not intended to represent any particular health insurance plan.