HMO

A plan built around a network

An HMO, short for health maintenance organization, is one of the most common plan types on the individual market. It covers care from doctors, hospitals and specialists inside its network. Outside that network, it generally pays nothing except for true emergencies.

Most HMOs also ask you to:

• Choose a primary care physician who coordinates your care.
• Get a referral from that doctor before seeing most specialists.

Because the insurer controls the network tightly, HMO premiums are often lower than PPO premiums for similar benefits.

Example

Tasha is a self-employed hairstylist with an HMO plan. She wakes up with persistent knee pain.

1. She books an appointment with her primary care doctor, who examines her and refers her to an in-network orthopedist.
2. The orthopedist orders an MRI at an in-network imaging center. The plan requires prior authorization, which the doctor's office handles.
3. Everything is covered under her plan's normal cost sharing.

If she had gone straight to an orthopedist outside the network, the HMO would likely have paid nothing, and she would owe the full bill.

Pros of an HMO

• Lower premiums in many markets.
• Coordinated care through one main doctor.
• Predictable costs when you stay in network.

Cons of an HMO

• No coverage out of network except emergencies.
• Referral steps can slow down specialist care.
• Networks can be narrow, sometimes limited to certain hospital systems.
• Coverage is usually local, which matters if you travel or split time between states.

Marketplace vs private plans

In Florida and many other states, a large share of Marketplace plans are HMOs, and PPO options on the exchange are limited or absent in some counties. Private plans sold outside the Marketplace are more likely to use broad PPO networks with national access. For a self-employed person who travels for work, has kids in college out of state, or wants a specific specialist, that difference can outweigh the premium savings of an HMO.

How to decide

Ask yourself three questions:

• Are my current doctors and preferred hospital in this HMO's network?
• Do I spend significant time outside my home area?
• Am I comfortable getting referrals before seeing specialists?

If the answers are yes, no, and yes, an HMO can be an excellent value.

Our comparison of private vs Marketplace plans for the self-employed goes deeper on network choices, and Florida individual health insurance covers what is common locally. To check whether your doctors are in network, request a quote.