Affordable Care Act
Why Younger Health Insurance Shoppers Should Consider HMO Plans
Published on December 23, 2015
Some people think that HMO-style health plans are just for older shoppers, but is that true?
There’s no good reason why younger health insurance shoppers should steer clear of HMOs. In fact, some younger health insurance shoppers may find HMO (Health Maintenance Organization) plans especially appealing.
HMO plans often cost a little less in terms of monthly premiums and, since your care is going to be coordinated by a primary care physician, it takes some of the burden off of you when you need to see a specialist or find a network medical provider.
People who want to take a more hands-on approach to their own health care may prefer a PPO (Preferred Provider Organization) plan where they have broader access to network physicians and no need to coordinate care through a single point of contact.
Increasing popularity of HMO plans
Health Maintenance Organization plans are making a comeback in the age of Obamacare.
During the last Obamacare open enrollment period, HMOs accounted for 39% of all health insurance plans selected by consumers (according to a March 2015 eHealth study). This made HMOs second in popularity only to PPO (Preferred Provider Organization) plans, which accounted for 42% of all plans selected by shoppers.
By comparison, in the months before the 2014 provisions of the Affordable Care Act took effect, HMO plans accounted for only 9% of all plans selected by eHealth shoppers (see December 2013 eHealth study).
HMOs and costs
As a rule, HMO plans tend to be a bit less expensive than PPO plans in terms of their monthly premiums.
That means you’ll pay less per month for your coverage. They sometimes come with deductibles that are a bit higher – meaning you may pay a bit more out of pocket when you actually receive medical care.
That said, younger people who are healthy and rarely see the doctor may find plans with lower premiums and higher deductibles a good option – so long as they can afford the full deductible in case of an emergency.
HMOs and coverage
The coverage provided by HMO plans is generally comparable to that provided under other kinds of health insurance plans. All major medical health insurance plans (including HMOs) provide coverage for the federally-mandated “10 Essential Health Benefits,” and all provide coverage for certain preventive care services at no out-of-pocket cost.
That said, HMO plans do place some restrictions on which doctors you can see and how your care is coordinated.
HMO plans typically require you to select a primary care physician, who is your primary point of contact for all health concerns. Your primary care doctor will refer you to specialists and order lab tests from other medical care providers within the HMO network when these things are called for.
PPO plans, by comparison, generally allow you to see in-network specialists and other medical service providers without the need for a referral from your primary doctor.
The coverage provided for prescription drugs doesn’t necessarily vary much between HMO and PPO plans. All health insurance plans have their own “formulary” of covered drugs. If you take prescription drugs on a regular basis, just make sure that your drugs are covered by the insurance plan you’re considering at a level that’s affordable for you.