How am I billed in an HMO Plan?

If you are looking for the most affordable type of health insurance that will also provide excellent levels of medical care, then an HMO (Health Maintenance Organization) may be for you.

What is an HMO

An HMO is a type of managed health care plan that provides their members a service network of doctors and hospitals to choose from. The medical facilitators who participate in an HMO are under a contractual agreement to provide medical attention to the HMO members.

How are costs different for HMOs?

Because there is such a regimented service network system in place, the insurance company has more control over the costs and bottom line of the medical care provided. This allows for the overall costs for HMO membership to be the least expensive type of medical insurance. Within an HMO there are different price points for coverage a member can choose from and that makes billing in an HMO plan fluctuate a bit.

How do HMOs bill?

A member of an HMO is billed monthly for their premium. That premium must be paid on time to be considered an active member of the plan. Depending on the insurance level the person opted into, a member may or may not have to pay a co-payment to see a doctors appointment. If the doctor orders specific tests such as blood work or a brain scan, a member will not have to make any out of pocket payments as the additional treatment is included in their treatment plan.

The medical treatment provided by HMOs is on a prepaid basis, thus members are only billed for a fixed monthly rate (premium). Regardless of how much medical attention is needed at any given time, the HMO will cover the costs. The premium entitles the member to take advantage of preventive medicine, office visits, hospitalization and surgery.