What Is an HMO, and Who Is It Good For?
An HMO is like having a home base for your health care. You have one main doctor who knows you well and helps guide your care. In return, you often pay less. Let's see how it works.
How an HMO works
HMO stands for Health Maintenance Organization. Here are the main rules:
You pick a main doctor. This is your primary care doctor. They are your first stop for most health needs.
You need a referral for specialists. If you need a heart doctor or a skin doctor, your main doctor usually sends you. This is called a referral.
You stay in the network. HMOs usually only pay for doctors in their network. If you go outside it, you may pay the whole bill. Emergencies are the big exception.
Why people like HMOs
Lower costs. HMOs often have lower monthly premiums and smaller copays.
Less paperwork. You usually don't have to file claims yourself.
One doctor who knows you. Your main doctor sees the big picture of your health.
The trade-offs
Fewer choices. If your favorite doctor isn't in the network, you may need to switch.
Extra step for specialists. Getting a referral can take time.
Little or no coverage away from home. If you travel a lot, or your child goes to college in another state, regular care there may not be covered.
Meet Sam
Sam is 32 and pretty healthy. He sees a doctor once or twice a year. He lives in the same town as all the doctors in his HMO network. Last spring, he got a rash that wouldn't go away. He visited his main doctor, who gave him a referral to a skin doctor in the network. Sam paid a $40 copay for that visit.
For Sam, the HMO works well. He pays less each month, and the referral step didn't slow him down much.
An HMO might be a good fit if you:
Want lower monthly costs
Are happy with the doctors in the network
Like having one main doctor guide your care
Don't travel often or need care in other states
An HMO might not be a good fit if you:
Want to see any specialist without asking first
Have a doctor you love who isn't in the network
Key takeaways
With an HMO, you pick a main doctor who sends you to specialists.
HMOs usually only pay for in-network care, except in emergencies.
In return, HMOs often cost less each month.
