Health Maintenance Organization (HMO) 101

Health Maintenance Organization (HMO) 101What Is A Health Maintenance Organization?

A health maintenance organization (HMO) is exactly what it sounds like- an organization that provides health care through a maintained network of providers who are under contract with the organization. Although HMOs began as early at the 1900s, they became increasingly viable for businesses after the HMO Act of 1973 put grant money towards beginning and growing HMOs and removed some state-specific restrictions.

Since then, HMOs have become one of the most affordable ways to secure health insurance coverage. The HMO will contract the services of health care providers to work within the organization. That means that members of the HMO will be limited to the choice of providers who are under contract with the organization. On one hand, this limits the number of health care providers the people participating in the HMO can visit. For example, out of network care is usually not covered unless there was an emergency.

On the other hand, because these health care providers know they will have a certain number of patients coming to them from within the HMO they are able to offer lower premiums. This means both increased stability for health care providers and decreased expense for members of the HMO.

HMOs may also have regulations around where you live and work. For example, to participate in certain HMOs based on the eastern slope, you may need to live or work on the eastern slope.

These organizations also generally tend to have a higher emphasis on holistic care, working to prevent illness before it happens and maximize wellness in their participating members.

Would an HMO be a fit for your nonprofit? To help understand the best type of insurance for your business, contact Colorado Nonprofit Insurance Agency. Located in Denver, our team is here to meet all of your Colorado commercial insurance needs.