What Is HMO Health Insurance?
Health Maintenance Organizations (HMOs) are one of three types of major health care insurance systems. The other two systems are Preferred Provider Organizations and Point-of-Service Plans. HMOs were made popular in the 1970s. They have come to be used by many employers and health care providers. Over the years HMOs have come to be viewed as offering clear benefits and challenges.
History
In the early 1930s and earlier, Americans received medical support directly from a private physician and paid for the support through their individual medical plans. In the late 1930s, cooperative health plans such as the Group Health Association were formed, but most Americans continued to receive and pay for medical care directly through individual plans established with their personal physician. Then in the late 1960s as health care costs continued to rise, Americans began to enroll in HMO programs mostly through the system created by Henry Kaiser, a prominent entrepreneur who rose to acclaim during World War II.
HMO Act
President Richard Nixon signed off on the HMO Act in 1973. After the Act was signed into law, the health care insurance organization plans faced opposition from professional organizations like the American Medical Association. Despite individual physician concerns that HMOs would negatively influence the level of medical care provided to patients, HMOs grew in popularity. Nearly 30 years after the HMO Act was signed into law, HMOs outnumbered private health care insurance plans and enrolled more than 80 million members.
Who Can Participate
HMOs have an annual employer participant enrollment period. Employers work with the HMO to schedule the annual enrollment period, which typically lasts for four to six weeks and often occurs during the last quarter of the year. Employees can sign up as a new member in the HMO during the open enrollment or make adjustments to their existing plan. Self-employed workers, contractors and consultants can also sign up for coverage through an HMO on their own or through a union. Most HMO plan carriers like Aetna, Blue Cross and Blue Shield and Cigna allow people to enroll directly through their websites at any time of the year. If you enroll on your own, you will be responsible for costs and paperwork associated with the plan. If you enroll through your employer, your employer will handle most of the paperwork and process your monthly installment payments directly through their payroll system.
Network
After you enroll in an HMO, you must receive your medical coverage through a physician who actively participates in the HMO's network of physicians. In-network physicians conduct annual health care check-ups, sign referrals so that you can visit a specialist like a cardiologist. If you receive medical care from an out-of-network physician, you will likely have to cover medical expenses related to the care yourself.
Considerations
The privacy and confidentiality of patient records is a concern of some people who have an HMO membership. Patients often do not receive copies of their medical procedures when they participate in an HMO through their employer as the paperwork is typically handled between medical providers without getting the patient involved. Although this is a time savings, some people are concerned as to who an HMO might allow to review their medical records. The monthly costs of participating in HMOs has typically continued to increase putting health care insurance out of the reach of low-paid American workers, self-employed workers and citizens who are displaced.
Benefits
A key benefit derived from participating in an HMO is cost reduction. Because large numbers of employers and individual employees participate in the HMOs, the cost of the insurance coverage can be lowered significantly. Patients who enroll and participate in an HMO directly through an employer also are not inundated with completing stacks of forms and paperwork when they visit their primary physician or a referral doctor.
Tags: health care, through their, care insurance, directly through, health care insurance, medical care, coverage through
