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What are the Different Types of HMO Coverage?

By Josie Myers
Updated: May 16, 2024

Health Maintenance Organizations (HMO) are one of the most common types of insurance coverage available. There are three basic types of HMO models known as the staff model, the group model, and the network model. These types are not based on exact coverage provided, but rather on the setting in which care takes place.

In the staff model of HMO coverage, the doctors and nurses are directly employed by the HMO. There is one location that all who are covered under the plan must go to receive coverage. The choice of doctors available is limited to those within that particular building. The staff does not treat any patients who are not covered by that particular HMO plan.

The group model is a bit less structured type of HMO coverage. Group practices are contracted by the HMO to give coverage to their clients. The staff is not employed by the HMO, although the group can be started by the HMO. The staff is able to treat patients with or without the HMO coverage.

The most common type of HMO coverage is a network model. In this model, the HMO contracts with independent physicians, or groups of physicians, in order to receive special rates for their clients. As with the group model, the staff can treat non-HMO clients as well.

When choosing HMO coverage, it is important to know what kind of model the plan follows. Each type of coverage has advantages and disadvantages that should be considered. The network model is by far the most common, but has some disadvantages compared to the staff or group models. In the staff model, and some group models, doctors have more flexibility, and generally have more resources at their disposal since everything is handled in-house. The network model requires that very particular procedures be followed in order to get tests and specialist appointments, a process that can require significant legwork on the part of both physician and patient.

The staff and group models are not without complications. While paperwork and procedures tend to be simpler, patients are limited when it comes to choice. A patient can not choose a doctor who is closest to their location, or who they like the best, but must remain within the particular group. Second opinions, particularly in the staff model, can sometimes be difficult to obtain since the doctors all work together. There are often extended wait times for appointments as well.

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Discussion Comments
By oasis11 — On Jul 10, 2011

@SauteePan - I agree with what you are saying but sometimes with a PPO you have to pay medical expenses regarding medical surgeries which can really add up quick.

When I had my daughter, I had PPO coverage and because my preferred doctor was not in their network, the insurance only picked up 75% of the bill.

I had to pay an additional $1,500 when my daughter was born. I am glad that I had the doctor that I wanted with me especially since it was my first born, but I can see how some people take advantage of HMO medical coverage because it is a lot cheaper and it covers all preventitve check ups as long as you see a doctor in the network.

I am finding that a lot more doctors are not accepting HMO health insurance in my area, so good thing that I have PPO coverage.

By SauteePan — On Jul 09, 2011

I have to say that if I had HMO insurance, I would also prefer the network model, but I really don’t care for HMO insurance. I prefer to have a PPO which allows me the opportunity to see any doctor I want and I don’t have to go through unnecessary referrals in order to see a specialist.

I think that when you develop a relationship with a doctor that knows your history, it can be really hard to switch to another doctor. It takes time to develop a certain comfort level with a doctor and I rather pay a little more with my insurance coverage than save some money, and have to see a doctor that I may not like.

I think that this is the biggest difference between an HMO vs a PPO. I think if your doctor is in the HMO network then you should consider saving yourself some money and going with HMO insurance, but if he or she is not then it might be worth looking into a PPO.

By ceilingcat — On Jul 09, 2011

@Azuza - I see what you're saying but I think if I had to have an HMO I would prefer the staff model. At least you get the convenience of having all your doctors in one place.

I also think it's probably easier to get referrals and stuff taken care of too. If for whatever reason you forget your referral form it would be no problem for the one doctor to get it from the other. It seems like they would probably get to know each other working in the same building.

That being said, I would prefer a PPO too!

By Azuza — On Jul 08, 2011

The staff model sounds like it's the least desirable for a patient. If for some reason you don't like the doctors that are part of the staff of your location you're pretty much out of luck!

I actually did my training for my last job in the same building as one of these staff model HMOs. The company was Kaiser Permanente which I believe is pretty famous for operating in this fashion.

There were all kinds off different doctors located in the building from the dermatologist to the OB/GYN. And of course there were a ton of sick people wandering around too!

It does sound convenient to have all of your doctors in one place but the drawbacks are too great for me. I definitely prefer the PPO model of health insurance.

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