HMO Insurance Is The Worse Type of Health Insurance
Hi, thank you for coming back for the latest edition of Beyond Primary Care’s blog- HMO Insurance is the worse type of health insurance. In Beyond Primary Care blogs we highlight healthcare news, advice for medical conditions, and how membership for care works! Beyond Primary Care is an insurance free, membership based family medicine clinic. Beyond Primary Care is the highest rated Direct Primary Care clinic serving patients in Ann Arbor and throughout Washtenaw, Livingston, and Wayne counties giving families and employers peace of mind about healthcare costs by providing affordable and accessible primary care services.
The primary purpose of the blog is to introduce healthy lifestyle concepts and answer common questions I receive from patients that I believe are important. I want to start discussions that will help educate, benefit, and improve your well-being.
In this blog post, I wanted to educate my patients and any prospective patients about:
HMO Insurances
Before I take a dive into explaining the disadvantages of HMO Insurances, I wanted to spend a moment to explain what these are, how they work, and how they differ from other health insurances, mainly PPO. I am not going to go into a ton of detail about other insurance plans here- other than to say there is no ‘perfect’ plan out there despite what an insurance broker may tell you.
A Health Maintenance Organization (HMO) insurance vertically integrates their own network of doctors, healthcare providers, and hospitals. These professionals or organizations agree to accept payment for services rendered at a specific level when working with its members. What other companies vertically integrate their business? Some examples include Tesla, Apple, and even Costco. After all, how do you think Costco is able to supply all their chain stores with those delicious Rotisserie Chickens?
HMO plans require you to select a primary care physician (PCP) who will determine what services you need and give referrals for specialists or testing. In theory, this allows for costs of healthcare to be better managed (ie.- saved) while at the same time allowing the members to reach the same care they would of received otherwise. The HMO insurance passes this cost savings to its members in the form of lower monthly payments, or premiums.
In contrast, another type of insurance, Preferred Provider Organization (PPO) plans also feature a network of providers. However, it also provides increased choices when picking a physician and there are fewer restrictions on seeing non-network providers. Since PPO insurances pay on a fee for service basis rather than a per-member basis, costs of monthly premiums are typically higher.
Lipstick on a Dragon
I’ll keep this simple. Trust me, I’m a doctor.
Health insurance companies, especially HMOs, will do anything to deny your claims or avoid reimbursement.
I can go over all the traditional arguments against HMOs that bullet point the same things you may find in any half-hearted blog piece: network issues, referral nightmares, medical authorizations galore. No no no, that is not my intention. I want to write from a physician perspective who fights to control the costs of healthcare.
One thought people may have as they read this is that the author, Dr. Jeff O’Boyle- a mere triple board certified physician who operates Ann Arbor’s highest rated Direct Primary Care Clinic- doesn’t take any health insurance and is writing about this topic. Why is he complaining? Such a Millennial.
Seriously though, HMOs are a special kind of awful. Even though Beyond Primary Care does not accept health insurance reimbursements for its services, Dr. Jeff still has to deal with health insurance companies for certain patient needs that can be inherently expensive such as referrals, durable medical supplies, and medications. HMO issues pop up time-to-time.
You may think that you are healthy and the only thing you need is a yearly influenza vaccine and annual check-up. A HMO insurance plan is perfect for that, it shines though on your enrollment papers with that lower costs and catches your eye. Easy right? Wrong. Healthcare is never that simple in the aggregate. Not for children. Not for adults. HMO insurances may look appealing from the pocket book perspective. Yet from time spent navigating you through the healthcare system to unexpected costs of specialists, diagnostic testing, and medications, the non-material and material costs are not worth the benefits.
HMO Insurance Is The Worse Type of Health Insurance
“Be Wary of HMOs”
I have said those words above on the Beyond Primary Care website since starting in October 2018. I have many stories where I feel my patient’s are wronged by their HMO plan. I wanted to share one in particular that stung:
The background is a patient with HMO insurance with a medical condition that would be aided by the help of a speciality medication. I’ll keep the details vague for anonymity, but again as above- trust me, I’m a …. Anyways, it is a common medication condition - you’ve heard it- and a very expensive medication to treat it. But hey, I want the best for my patients, what’s wrong with that?
At first, the patient’s HMO categorically denied the medication saying I was an ‘out of network’ physician. Fair, but it’s not like the patient can shake the ‘doctor tree’ and have a bunch of doctors who prescribe what I prescribe fall out. Through some clever insurance navigating, I spent an excruciating amount of time filling out forms and finally got the medication approved, only to have the patient’s HMO ‘benefits’ advise the patient that the portion owed was still greater than $500 per medication (and that was with pharmaceutical co-pay assistance).
What is the purpose of the health insurance if it is not to provide affordable means to obtain medications prescribed? This single patient example can lead to many other discussions about formularies, pharmacy benefit managers (PBMs), and pharmaceutical gouging.
However, at the end I want to leave you with this: HMOs are a type of health insurance plan that lost favor in the late 1990s secondary to restrictions. From a physician perspective, I see these restrictions once again increasing- albeit in different ways- where one day I suspect there will be a public push back.
A Note For Brokers
Direct Primary Care has become a key enrollment strategy to fill the healthcare solutions gap. If you are new to the Direct Primary Care movement, the good news is that Direct Primary Care is an easy sell. Families and employers need accessible and personalized coverage, and people are happy with how affordable it is. If you ignore Direct Primary Care during open enrollment, you are leaving thousands of revenue dollars for yourself on the table as Direct Primary Care is a key strategy
“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” - Buckminister Fuller
Thank you for reading.
Dr. Jeff O’Boyle with Beyond Primary Care
