HMO Health Insurance Plans

An HMO is a health maintenance organization.

An HMO offers many kinds of health care services to its members. In return, members (and their employers) pay a fixed cost each month for these services. HMOs are sometimes called health plans or managed care organizations.

HMOs are different from other kinds of health insurance in the way they manage the cost of health care and the services they offer.

HMOs try to keep health care costs down. They do this in a number of ways. For example, HMOs decide how much they will pay for each service. Then they contract with doctors and hospitals who agree to accept those payments. In some cases, HMOs pay doctors a fixed amount each month for each patient they see. Members must get their care from the doctors, hospitals and other providers who work with the HMO. This is called a network.

HMOs usually only pay for treatments or procedures that they can show are effective. They may require their members to try less expensive tests or treatments before they will cover ones that cost more.

HMOs usually require members to pay for part of their care. Members may pay a fixed amount, called a co-payment, for each service they get. The HMO may also have a yearly deductible. This is the amount members have to pay each year before the HMO pays for any services. Co-payments and deductibles help keep the cost of health care down. If members have to pay part of the cost of a service, they are not as likely to get services they do not need.

HMOs also require members to get approval before the HMO will pay for some services and treatments. This usually means that members have to get a referral from their primary care doctor or an approval from their HMO. If members get services without a referral and approval they may have to pay for the service themselves.

HMO’s in Illinois

Individual HMO plans are no longer available in Illinois. Blue Cross Blue Shield of Illinois does offer HMO’s plans for groups of two or more.

The HMOs of Blue Cross and Blue Shield of Illinois (BCBSIL) offer two different contracting provider networks — BlueAdvantage HMO and HMO Illinois—with the same range of features, which include:

  • Broad hospital coverage
  • No coinsurance
  • No deductible
  • Predictable co-payments for health care services including hospital visits and wellness
  • A vast network of contracting retail and mail service pharmacies
  • A Commendable Accreditation from the National Committee for Quality Assurance (NCQA)
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