Individual and family health plans
 Ready to get covered? 1‑888‑475‑6206  

What is an HMO?

One popular type of health plan is a Health Maintenance Organization, or HMO. This information will help you understand what an HMO is, how it works, and whether it is a good fit for you and your family.

Health Maintenance Organizations (HMO)

HMO plans are designed to protect you and your family from the costs of medical services you need when you’re sick or injured.

With an HMO, you choose a primary care physician (PCP) who coordinates your care using in-network doctors and hospitals. When visiting most specialists, a referral from your PCP is often required for the services to be covered. You won’t need a referral for OB/GYN, mammograms, mental health, or emergency care. You do not have the option to see out-of-network providers when you have an HMO (except for emergency services).

To go directly to Independence’s HMO plans, visit Keystone HMO plans.

What makes an HMO unique?

Lower costs

Many factors affect the cost of care. In addition to your monthly premium, you may also pay cost-sharing each time you receive medical care or have a prescription filled. Cost-sharing, or out-of-pocket costs, can include the following:

  • Deductible: A deductible is an amount you pay each year before your health plan starts paying for covered services. For example, if your plan has a $1,000 deductible, you will need to pay the first $1,000 of the costs for the health care services you receive in any given year. Once you’ve paid this amount, your insurance will begin to pay a portion or all of your health care costs, depending on the plan.
  • Copay: A copay is a flat fee you pay when you see a doctor or receive other covered services. For example, you might pay $20 to see a doctor.
  • Out-of-pocket maximum: An out-of-pocket maximum is the most you will have to pay for your health care expenses during a plan period (usually a year) for covered services received from providers that participate in the plan’s network. No matter what, you will not pay more than this maximum amount in a given year. Any care you receive for covered services after you meet your out-of-pocket maximum will be covered 100 percent by your insurance company.

In-network vs. out-of-network

All health insurance plans have contracted with doctors and hospitals to provide care to the plan’s members. These providers are called “network providers” or “in-network providers,” and they include PCPs, specialists, and even facilities, like labs, hospitals, and urgent care centers. A provider that isn’t contracted with the plan is called an “out-of-network provider.”

As a member of an HMO plan, you do not have coverage for out-of-network providers, except for emergency care.

Required PCP

All HMO plans require you to choose a PCP. This is the doctor you will see for most of your health care needs. Your PCP will coordinate your care through in-network doctors and hospitals and issue a referral when you need to see a specialist, such as a dermatologist or cardiologist.

Who would an HMO health plan be a good fit for?

An HMO plan is best if you have or want a PCP to coordinate your care and refer you to in-network specialists. Our HMO plans offer coverage for in-network doctors only. Typically, only emergency services are covered if you go out-of-network.

What are the pros and cons of an HMO?

Understanding the pros and cons of an HMO health plan is helpful when comparing your options.

Advantages of an HMO

Disadvantages of an HMO

  • Out-of-network care is not covered, except for emergency care
  • Must use in-network providers

How does an HMO compare to other health insurance plans?

In addition to HMO plans, Independence offers other types of plans to individuals and families. While all of the plans have some things in common, they also have some important differences.


Another popular plan option is a PPO (Preferred Provider Organization). While PPOs generally have the highest monthly premium of all the plan types (e.g., HMO, EPO), they offer members the most freedom to see providers both in- and out-of-network without referrals.

Want to learn more? Check out What is a PPO? and HMO vs. PPO: Which Plan Is Best for You?


Like an HMO, an EPO (Exclusive Provider Organization) requires you to use in-network providers (except for urgent and emergency care). But unlike an HMO, an EPO does not require you to select a PCP or get referrals before seeing a specialist. Also, some EPO plans come with a Health Savings Account (HSA) option. An HSA is a tax-free savings account where you can save money for your qualified medical expenses (like copays and deductibles).

Want to learn more about EPOs? Take an in-depth look: What is an EPO?

Know your options and find your plan

If you have questions, please call one of our Independence Blue Cross representatives or refer to our Frequently Asked Questions (FAQ).