HMOs and what they do

November 7, 10:02 AMIndianapolis Health Insurance ExaminerDianna Morrow

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Health Maintenance Organizations or HMOs are a special breed of insurance companies.  There are hundreds of them out there to choose from.  You may have one but do you know what you have?  HMOs were created to help decrease the cost of insurance.  They may or may not be a Not for Profit organization depending on the particular state they operate in or the license they were issued.

Normally an HMO is formed to create a pool of physicians, hospitals, clinics, Immediate Cares and other services that have all agreed to provide coverage for the insured under a set of charges or discounts that are lower than the rates charged by indemnity insurance companies.  Physicians are invited to join an HMO under their specialty and on joining they agree to provide services at a discounted rate.  This sounds like a doctor is shooting himself in the foot if he agrees to this discounted rate.  However, in return for this discount the doctor gets a steady stream of clients, directed at him through the employers who purchased the HMO.  The same thing applies to hospitals, clinics, etc. The draw back is that the list of specialists may be smaller and not include some physicians you might need or want to see. The list may also include specialists that cover a particular disease process but are located in another area or maybe in another city. The hospital list may also be limited, it may include some larger hospitals but may not include the one close to you. Some hospitals on the list may not provide all the services you might need, like pediatric care, or OB/GYN services.

Are HMOs a good choice?  They can be, but the only way to know this is to thoroughly read the fine print.  If you are offered an HMO as part of your employee package, ask questions.  How much coverage do you have, who can you see?  Do you need a referral?  What happens if you travel?  What if you have to go out of network to get the services you need?  In short, know your policy.  In this economy the smartest thing to do is be insurance wise.  You never know when you might need it.