What is a Health Maintenance Organization (HMO)?

A Health Maintenance Organization (HMO) is designed to provide health insurance coverage that emphasizes preventive care and effectively manages costs by coordinating services. One of the key characteristics of an HMO is its focus on preventing diseases before they occur, rather than only addressing them after they manifest. This proactive approach often includes regular check-ups, screenings, and educational programs aimed at promoting healthy lifestyles.

In addition, HMOs typically operate with a network of approved healthcare providers. Members are required to choose a primary care physician (PCP) who manages their overall care and refers them to specialists within the network, ensuring that the patient receives appropriate and coordinated care. By having a limited network of providers, HMOs can maintain cost control and streamline patient care, which differentiates them from other types of insurance models that might allow broader access to various healthcare providers regardless of their participation in a network.

This structure reinforces the importance of preventative care and makes HMOs unique among insurance methods.