HMO’s or 'How I Learned to Stop Worrying and Love the System'

HMO’s are the last topic in our series on the three types of health insurances that are available for you to purchase individually or have through an employer. All the plans we have discussed so far have had deductibles that would have to be met in all instances (Traditional plans) or in certain instances (PPO’s). We left off last week by talking about the limitations of most PPO’s in the area of wellness. HMO’s were formed on the thinking that if people took better care of themselves through routine checkups, potential health issues could be caught in the beginning stages and treated before they had a chance to become more serious. So, HMO’s (short for Health Maintenance Organizations) are the winner when it comes to wellness care.

In previous columns we compared health plans to people, because just as people have different personalities and no two people are exactly alike, health insurance plans are as diverse as people but can be categorized by similar characteristics. I like to think of HMO’s as the stereotypical mother. The Clair Huxtable (of The Cosby Show) of health plans. The reason I say this is, just like Mrs. Huxtable, HMO’s want you to take care of yourself (“Be sure to eat your liver, Theo” is a lot like “make sure you schedule your colonoscopy Mrs. Miller” in that they’re both preventive and both unpleasant). Also like Mrs. Huxtable, there were ‘house’ rules that had to be followed. If Denise wanted to hang out with her friends, or go ride her bike, she had to ask permission. The same thing applies to HMO’s. You’ve got a Mrs. Huxtable that you report to on your HMO. He or she is called your PCP or Primary Care Physician.

This doctor is the one who says who you can see and what you can have done. It’s designed to prevent wasted tests and specialist visits, both of which are expensive for the insurance company. This is the part that people don’t like about HMO’s. Its initial purpose however wasn’t only as a cost-cutter. Originally picking a PCP was a throwback to the 50’s when everybody had his or her own personal doctor. Of course, as time went on, personal physicians went the way of house calls and little black bags.

The nice thing about those old-time personal physicians was that they knew everything about your health. So HMO’s initially started off by having one doctor care for all your health issues that didn’t require a specialist on the assumption that he or she would be able to coordinate all of your care.

Of course, over time, that has evolved into the system we have today. Everything else considered, HMO’s aren’t all bad, especially if you have children. Kids usually go to the doctor much more than adults do. Even copays can get expensive if you’re going every other week. HMO’s typically have the lowest copays around. What’s more, they have EVERYTHING covered by copays…hospitalization included. Given a choice, most people would gladly pay a $200 copay for a hospitalization rather than a $500 deductible plus 20 % over that. The thing to be aware of with an HMO is that the hospital charges are per occurrence as opposed to once a year like the other types of insurance. There are some other advantages to HMO’s. Oftentimes they are ‘staff’ models (there are more than 10 types of HMO models and that goes beyond a column like this) which means that they have everything in one place. If your Primary Care doctor says you need an x-ray or blood work, you can go down the hall and have it done instead of driving clear across town to another facility.

Additionally most HMO’s cover maternity automatically, whereas other types of insurance have it as expensive add-ons or not at all. Lastly, some states have HMO’s that you can automatically get into with limited qualification on your part (called underwriting). Avoiding underwriting by taking advantage of current law is the topic of next week’s column. Until then, be healthy !