The acronym HMO stands for Health Maintainance Organizations (HMO). Health maintenance organizations (HMOs) provide health insurance coverage for a periodic (monthly or annual) fee. They are companies charged solely with the responsibility of managing the provision of health services through other health care facilities. They function as an intermediary between the hospital and the individual or companies seeking to provide health coverage for their employees.
An HMO limits coverage of members to medical care provided through a network of healthcare providers who are under contract with the HMO.
How HMO works
An HMO is an organized entity that provides primary and auxiliary health services to its subscribers. These entities acquire their network of healthcare providers by entering into contracts with clinical facilities, primary care physicians, and specialists.
The medical organizations that enter into contracts with the HMO are paid an agreed-upon fee to offer a range of health services to the HMO’s subscribers. The agreed fee enables the HMO to offer lower premiums than other forms of health insurance plan while keeping the high quality of care from its network.
5 Things to consider before choosing an HMO company
When faced with the decisions to opt for an HMO insurance plan, you should take the following into consideration
- The cost of premium: while premium maybe cheaper under the HMO plans, it is better to shop for available options and compare their prices.
- Out-of-pocket expenses: these are costs that are outside the scope of the HMO plan that the subscriber pays from his pocket.
- Specialized medical care: consider the requirements you may have for specialized medical care and the cost implication for implementing them.
- Primary care providers: Make sure you go through their network of healthcare providers to have a perception of their services. Also, look out for health providers in their system that are within your locality in case of emergency.
- Responsiveness: because of the nature of their service, health emergencies can occur at any time. Be sure to confirm that your HMO provider offers 24-hours customer care service to its subscribers. That way, you might have the required support during an emergency
However, there are two other alternatives to the HMO, namely Preferred provider organizations (PPOs) and point-of-service plans (POS). The most commonly used plan in Nigeria is the HMO, but it is essential to follow the above steps before choosing an HMO provider.