Chapter 18



Chapter 46

Health Maintenance Organization (HMO)

LEARNING OBJECTIVES:

A. Have a basic understanding of health maintenance organizations

REVIEW:

This brief chapter looks at health maintenance organizations (HMOs). HMOs are presented as an alternative to traditional health insurance, with the benefit of (generally) lower employee expenses. Three types of HMO model are covered: staff model, group practice model, and individual practice association (IPA) plan. Tax treatment is the same as for other health care plans. A reference is provided for learning more. The chapter includes an extended chart comparing an insured plan with two types of HMO plans.

Chapter Outline:

A. What Is It?

B. When Is IT Indicated?

C. Advantages

D. Disadvantages

E. HMO Benefit Structure

F. Types of HMOs

G. Tax Implications

H. Where Can I Find Out More About It?

I. Comparison Chart

FEATURED TOPICS:

Health Maintenance Organizations (HMOs)

FIGURES:

Figure 46.1 Employer, Inc. Comparison of Health Care Benefits

CFP® CERTIFICATION EXAMINATION TOPIC:

Topic 29: Group medical insurance

A. Types and basic provisions

2) Managed care plans

b) Health maintenance organization (HMO)

COMPETENCY:

Upon completion of this chapter, the student should be able to:

1. Have a basic understanding of health maintenance organizations

KEY WORDS:

health maintenance organization (HMO), staff model, group practice model, individual practice association (IPA)

DISCUSSION:

1. Discuss advantages and disadvantages to using an HMO rather than a traditional health care insurance plan.

2. Discuss differences between the three types of HMO organization.

QUESTIONS:

1. Which one of the following is normally a cost containment feature of most HMOs?

a. co-payments

b. coinsurance percentage

c. stop loss limit

d. expense reimbursement

Chapter 46, p. 353

 

 

2. Which of the following is typical of an HMO benefit structure?

a. reimburses employees for expenses

b. employs or contracts directly with providers

c. pays providers for health care as required by employees

d. employer/subscribers pay a fee for each service used by employees

Chapter 46, p. 353

3. Which of the following are usual types of HMO organization?

(1) preferred provider organization

(2) group practice model

(3) individual practice association

(4) staff model

 

a. (1) and (3) only

b. (1) (2) and (3) only

c. (2) (3) and (4) only

d. (1) (2) (3) and (4)

Chapter 46, p. 354

 

4. In which one of the following are doctors directly employed by the HMO?

a. independent practice

b. group practice

c. IPA

d. staff model

Chapter 46, p. 354

 

ANSWERS:

1. a

2. b

3. c

4. d

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