• A health maintenance organization (HMO) is a network or organization that provides health insurance for a monthly or annual fee.

  • HMO is made up of a group of health insurance companies that limit coverage to health care provided by doctors and other providers under contract to the HMO.
  • These contracts allow premiums to be lowered because health care providers have the advantage of referring patients to them, but they also place additional restrictions on HMO members.
  • HMO plans require members to first get health care services from a designated provider, known as a Primary Care Physician (PCP).
  • Preferred provider (PPO) plans and point-of-care (POS) plans are two types of health plans that are alternatives to HMOs.
  • If you have an HMO plan, you should always contact your PCP first, who will then refer you to a network specialist. With a PPO plan, you can see a specialist without a referral.
  • If you have an HMO plan, you must stay in the provider network to get coverage. Patients still have a network of providers under the PPO plan, but they are not limited to seeing these doctors.