What Is a Health Maintenance Organization?
- A health maintenance organization (HMO) is a network or organization that provides health insurance coverage for a monthly or annual fee.
- An HMO is made up of a group of medical insurance providers that limit coverage to medical care provided through doctors and other providers who are under contract to the HMO.
- These contracts allow for premiums to be lower—since the healthcare providers have the advantage of having patients directed to —but they also add additional restrictions to HMO members.
- HMO plans require that participants first receive medical care services from an assigned provider known as the primary care physician (PCP).
- Preferred provider organizations (PPOs) and point-of-service plans (POS) are two types of healthcare plans that are alternatives to HMOs.