What is HMO Health Insurance?

What is HMO Health Insurance?

An HMO (Health Maintenance Organization) is one of many managed healthcare systems available to Americans to provide health insurance in case of illness or accident. HMO’s are one of the two most popular healthcare systems available in the United States, along with its cousin, the PPO (Preferred Provider Organization).

Participants enrolled in HMO’s pay a fixed monthly fee for their healthcare, which is considered a pre-payment to healthcare to the provider. In return, the participant receives medical services including doctor visits, hospitalization and surgery for no other cost, except a nominal co-payment (usually less than $50).

Each HMO has a network of doctors who participate in the system. When first enrolling in the system, all HMO participants choose a PCP, a primary care physician, from the HMO network who will serve as a caretaker for the enrollee’s future medical needs. The primary care physician (also known as a primary care provider) is the first line of defense, and the first person to call, in the time of medical need (except an emergency). The PCP gives referrals for specialized care and recommends further medical treatment when necessary.

Though the low cost of participating in HMO health insurance is the obvious advantage, there are disadvantages that must be weighed before choosing this type of managed healthcare.

  • Although most HMO’s have an extensive network of doctors and hospitals, not all physicians participate in HMO’s. Participants within an HMO must visit only those doctors within the system, or the provider is likely to deny a health claim.
  • The enrollee’s primary care physician must refer the enrollee to a different doctor for any treatment beyond his realm of expertise. If a referral is not obtained from the PCP before further treatment is obtained (except in case of emergency), the insurance provider may not substantiate the claim.

HMO health insurance is a low cost and effective managed healthcare plan in which many Americans participate.  If you are looking for quotes on HMO health insurance, give Qooqe.com a try and you can get instant online quotes for your needs. Be sure to research all aspects of a healthcare plan before enrolling.


  1. We are told by Kaiser that to enroll in their Medicare Advantage Basic plan, each applicant must have Parts A and B, and that once the Kaiser coverage is invoked, there would be a roughly $35 monthly “penalty” for NOT HAVING HAD Part D since beginning plain Medicare years ago. (We are both 71 now.) Further, we are told that this is a Medicare requirement, not an arbitrary Kaiser penalty.

    Does this ring true? What if Part D (which Kaiser agrees is not part of their plan) is not desired nor considered to be needed? If true, and one elected to continue simple Medicare outside of Kaiser or any other Medicare Advantage plan, would there be a similar penalty?

    • Yes. Unfortunately this is a Medicare requirement regardless of the plan provider. Medicare requires a late enrollment penalty. It is calculated by charging 1% of the “national base beneficiary premium” by the number of months you were eligible, but did not apply.


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