HMO (Health Maintenance Organization)
Plain English
An HMO is a health plan that generally pays only for care from its own network of doctors and hospitals, except in emergencies. Many HMOs ask you to pick a primary care doctor and get a referral before seeing a specialist. In exchange for those limits, HMOs often have lower premiums and costs than plans with more choice.
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Definition
A health maintenance organization (HMO) is a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care except in an emergency, and it may require members to live or work in its service area. Many HMOs require a primary care doctor's referral to see a specialist.
Why It Matters
With an HMO, going outside the network can mean the plan pays nothing, not just a bit less. If you want to keep specific doctors, or you travel or live part of the year elsewhere, the network and service area matter more than the premium.
Real-World Example
Imagine someone on an HMO develops knee pain. They see their primary care doctor first, who refers them to an in-network orthopedist, and the visits are paid under the plan's normal cost sharing. Their friend, on the same HMO, books an out-of-network specialist directly without a referral, and the plan pays nothing for that visit.
Common Misconceptions
- An HMO won't pay for emergencies away from home. HMOs generally cover emergency care out of network.
- All HMOs require referrals. Many do, but rules vary by plan.
- An HMO is the cheaper choice. Premiums are often lower, but compare the deductible and out-of-pocket maximum too.
Key Takeaways
- HealthCare.gov: an HMO "usually limits coverage to care from doctors who work for or contract with the HMO."
- It generally won't cover out-of-network care except in an emergency.
- An HMO may require you to live or work in its service area.
- Check whether your doctors are in the HMO's network before enrolling.
Frequently Asked Questions
What is an HMO?
A type of health plan that usually covers care only from doctors who work for or contract with it, except in emergencies.
What's the difference between an HMO and a PPO?
An HMO generally won't cover out-of-network care except in emergencies. A PPO lets you use out-of-network providers at an additional cost, and usually costs more.
Do I need a referral with an HMO?
Many HMOs require a referral from your primary care doctor to see a specialist. Check your plan's rules.
Does an HMO cover emergencies out of network?
Generally yes. HealthCare.gov says an HMO generally won't cover out-of-network care except in an emergency.
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Explore the rest of the Health Insurance category.
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The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- healthcare.govHealth Maintenance Organization (HMO) - Glossary · HealthCare.gov (U.S. Centers for Medicare & Medicaid Services)
- healthcare.govPreferred Provider Organization (PPO) - Glossary · HealthCare.gov (U.S. Centers for Medicare & Medicaid Services)
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.