What does HMO stand for? In US health insurance it stands for Health Maintenance Organization, a type of plan that covers care from a set group of doctors, hospitals and clinics called its network. In most HMO plans you pick a primary care doctor, and that doctor sends you to specialists when you need one.
The trade off is simple to state. HMOs tend to have lower monthly premiums and lower out of pocket costs than other plan types, but they give you less freedom to see any doctor you like. Outside of true emergencies, care from doctors outside the network is usually not covered at all.
Quick facts
Stands for
Health Maintenance OrganizationType
Initialism, said H M OWhat it is
A health insurance plan with a fixed provider networkKey rules
Primary care doctor, referrals, in network careSeen on
Insurance cards, open enrollment forms, benefit summariesRelated terms
PPO, EPO, POS plan, PCP, HSAOther meaning
In the UK: house in multiple occupation
What does HMO stand for in health insurance?
The three words describe the original idea behind these plans:
- Health: the plan pays for medical care.
- Maintenance: it puts weight on keeping you well, through checkups, screenings and shots, rather than only paying when you get sick.
- Organization: the insurer and a network of providers work together as one system.
HMOs grew in the United States after Congress passed the Health Maintenance Organization Act of 1973, which encouraged employers to offer them. Today you find them in job based coverage, plans bought through the health insurance marketplace, and Medicare Advantage.
How an HMO plan works day to day
- Choose a primary care physician. Your PCP is your main doctor and the first stop for most care.
- Get a referral for specialists. If you need a skin doctor or a heart doctor, your PCP usually has to send you. Some plans let you see certain specialists, such as an OB GYN, without one.
- Stay in network. Labs, hospitals and pharmacies should all be on the plan's list.
- Emergencies are the exception. True emergency care is covered even at an out of network hospital.
Insurance card line: "HMO. PCP: Dr. Lee. Referral required for specialist visits." This tells the front desk at a specialist's office to check for your referral before they see you.
HMO vs PPO and other plan types
Open enrollment forms often show several sets of letters side by side. The main differences come down to network rules and referrals.
| Plan | Stands for | Out of network care | Referrals |
|---|---|---|---|
| HMO | Health Maintenance Organization | Usually not covered, except emergencies | Usually needed |
| PPO | Preferred Provider Organization | Covered, at a higher cost | Usually not needed |
| EPO | Exclusive Provider Organization | Usually not covered, except emergencies | Often not needed |
| POS | Point of Service | Partly covered | Usually needed |
A plan of any of these types can also come with a high deductible. Some of those plans let you open an HSA, a health savings account, to set money aside for medical bills before tax.
Who an HMO tends to suit
People often pick an HMO when they want predictable costs and are happy to use the doctors on the plan's list. It can be a good fit if your current doctors are already in network, you do not travel much, and you like having one main doctor coordinate your care.
A PPO may suit someone who sees several specialists, lives part of the year in another state, or wants to keep a doctor who is not in any HMO network. Neither choice is right for everyone, which is why employers often offer more than one.
HMO in the UK means something else
Outside health insurance, the same letters have a housing meaning in the United Kingdom: house in multiple occupation. It describes a rented home shared by several tenants who are not one household, such as a shared student house. Landlords there may need a license for these homes. If you are reading a British property listing, HMO refers to housing, not health care.
In US business and HR writing, though, HMO almost always means the insurance plan. Other workplace letters, from PTO to FMLA, are gathered in the business acronyms hub.
Pronouncing and spelling HMO
Say the three letters: "H M O." Because the letter H begins with a vowel sound ("aitch"), write "an HMO plan," not "a HMO plan." The plural is HMOs, with no apostrophe.
- "We switched to an HMO to lower our premium."
- "Is this clinic in my HMO network?"
- "Two of the four options are HMOs."
- "My HMO needs a referral before I see the allergist."
For help with the many letters on medical paperwork, the HIPAA page covers the privacy rule that applies to your health records.
Questions people ask
What does HMO stand for in health insurance?
It stands for Health Maintenance Organization. It is a plan that covers care from a network of providers and usually asks you to choose a primary care doctor who gives referrals.
What is the difference between an HMO and a PPO?
An HMO usually covers only in network care and needs referrals for specialists, often at a lower cost. A PPO lets you see out of network doctors and specialists without referrals, but premiums and shared costs are usually higher.
Does an HMO cover emergencies out of network?
True emergency care is generally covered even at an out of network hospital. Follow up care after the emergency usually has to go back to in network providers, so check your plan's rules.
Do I need a referral with an HMO?
Most HMO plans require one from your primary care doctor before you see a specialist. Some plans list exceptions, such as yearly visits to an OB GYN.
Is it a HMO or an HMO?
Write "an HMO," because the letter H is said "aitch" and starts with a vowel sound.