Ever wondered what HMO stands for and why many people in Nigeria are opting for it? If you have been curious about how healthcare works under an HMO, you are in the right place.
An HMO, or Health Maintenance Organization, is a type of health insurance plan that focuses on providing preventative care and uses a network of contracted doctors, clinics, and hospitals.
In this blog post, we will dive deeper into HMOs, explaining how they function and how they might benefit you.
What is the meaning of HMO?
The term stands for ‘Health Maintenance Organization’ and in Nigeria is the general term for insurance companies that provides healthcare services through a network of approved hospitals.
For example, Reliance HMO offers comprehensive healthcare access, ensuring members receive quality and affordable healthcare through their extensive network.
These organizations are charged with the responsibility of managing the provision of standard healthcare services via a network of hospitals under the plan. They serve as a middleman between the hospital and clients seeking healthcare services.
How HMO works in Nigeria
HMOs in Nigeria primarily serve companies and corporate employees. They offer healthcare plans to businesses for their employees and dependents. Here’s the process breakdown:
- HMO Network & Plans: Each HMO has a network of approved hospitals and clinics. They offer various healthcare plans with different coverage levels and costs (premiums).
- Company Chooses a Plan: Companies choose a plan (or multiple plans) for their staff based on budget and desired coverage.
- Enrollment & Payment: Employees choose a specific plan from the company’s options. The company pays the premium to the HMO, covering enrolled employees for a set period (usually a year).
- Accessing Healthcare: Employees use in-network hospitals/clinics from the HMO’s list (e.g. Hygeia HMO, Avon HMO).
- Treatment & Payment: The HMO directly pays the hospitals for covered and rendered services used by employees.
Common HMO Terminology
- Benefits: What are benefits? These are the package of medical services such as tests, drugs and treatments included in your health plan. The plan usually sets a limit to these benefits. These limits are agreed upfront per plan for full transparency.
- Out of pocket: This refers to the medical costs that you pay yourself and are not reimbursable by the HMO. So when you go the hospital without health insurance, you always pay “out of pocket”. When you go for a service that is excluded from your health plan, you also pay out of pocket.
- Exclusion: Exclusions refers to all the services the HMO will not cover. These exclusions can vary from plan to plan and it is essential you get to know what is excluded from your plan. Hygeia HMO plans have clearly described exclusions on each plan page.
- Capitation: Is a fixed, pre-arranged monthly payment received by the hospital from the HMO. These payments are fixed regardless of how often the patient uses the service but restricts members to that specific hospital.
- Network: The doctors, hospitals, and providers your HMO has contracted with to deliver health care services to their members.
- Fee of service: It is a payment module where doctors and other health care providers receive a fee for each service such as consultations, tests or procedures. Payments are made only after services are provided.
Types of HMO Plans/Models
HMOs operate under different models, which dictate how healthcare services are rendered.
- Staff Model: In this model, the HMO pays the physicians who are their salaried employees a certain amount of salary regardless of the number of patients they treat.
- Group Model: The group HMO model is where they treat and provide services only to HMO insurance holders whom they have a contractual agreement with.
- Network Model: This is where many groups of physicians agree with the HMO to provide services to numerous patients who are not HMO insurance holders.
- Independent Practice Association: This is where the HMO has an agreement with a single physician or with other medical associations that have contracts with single physicians. These associations or physicians render services to HMO insurance holders at a negotiated price.
Pros and Cons of HMO
Pros:
- Gives the holder cheaper out-of-pocket costs for services within the network.
- The network emphasizes preventive care and wellness programs.
- Has a unique channel for simplified billing and administration.
Cons:
- You have a limited choice of healthcare providers.
- The primary care physician (PCP) must refer you for specialist visits.
- Most of the time, out-of-network care is usually not covered, except for emergencies.
What Does an HMO Premium Cover?
HMO plans cover almost everything as regards healthcare services ranging from medical checkups to major or minor surgery. However, there are restrictions based on the type of plan you opt for. Many HMO organizations would group their services into different categories, and the customer would have to select which plans work best.
An HMO plan has many benefits and covers all but is not limited to the following services mentioned below.
- Ambulance Service
- Dental care
- Optical care
- General Outpatient and in-house specialist consultation
- Admissions
- Accident and Emergencies
- Prescribes Medicines and Drugs
- Physiotherapy
- Scans
- Antenatal and childbirth
- Minor Surgeries and procedures
- X-rays, Laboratory & Diagnostic Test
However, not all the plans offer the services mentioned above. The services are dependent on the choice of plan for a given period.
What is the Difference Between HMO and Health Insurance?
HMO stands for Health Maintenance Organization and is a type of health insurance plan that provides service through a network of healthcare providers.
Health Insurance is a broader term that takes care of the medical expenses incurred by the insured. The coverage to get depends on the policy the insured purchased.
It covers various types of plans, like HMOs, PPOs (Preferred Provider Organizations), and others. The insured has more flexibility in choosing healthcare providers and does not always require referrals for specialists.
Why is HMO in Nigeria a better option?
There are several reasons why you should choose an HMO plan instead of traditional health insurance, and they include the following
- There is high coordination between the HMO provider, and the healthcare provider makes it easy for clients to access healthcare services
- It is cheaper to maintain and easy to administer
- Many HMO plans do not have deductibles
- It is often the best choice in the case of an emergency.
How to Apply for HMO in Nigeria?
Enrolling in a Health Maintenance Organization (HMO) in Nigeria can be a great way to manage your healthcare needs. Here’s a breakdown of the process, making it simple and informative:
- Pick Your Plan: Research HMOs and pick one with hospitals you like and coverage that fits your needs (family, individual, etc.).
- Enroll Yourself: Visit the HMO office with your ID, contact info, and (if employed) proof of income. Choose a plan and pay the fee. You’ll get an ID for HMO-approved hospitals.
- Employer Handles It? If your company offers HMOs, ask HR. They might register you and deduct costs from your salary.
- Add Family (Optional): Bring marriage certificate (spouse) and any needed documents for dependents when enrolling them.
- Pay Your Way: Choose monthly payments through your bank or a one-time payment – the HMO will explain the options.
Conclusion
Government officials and Civil Servants are also covered by a similar HMO scheme which is administered and managed by the NHIS (National Health Insurance Scheme)
Frequently Asked Questions
Is HMO Compulsory in Nigeria?
HMO is not compulsory in Nigeria but we recommend you buy it for yourself and your household. Health Maintenance Organizations (HMOs) play a significant role in providing healthcare services in Nigeria.
HMOs act as intermediaries between healthcare providers and individuals covered by health insurance, coordinating and managing the delivery of healthcare services.
They strive to ensure that policyholders have access to quality healthcare and facilitate the settlement of claims between insurers and healthcare providers.
It is important to note that the specific details and requirements of health insurance coverage, including the involvement of HMOs, may vary depending on the type of insurance plan, the insurance provider, and other factors.
Therefore, it is advisable to consult with relevant authorities, insurance companies, or healthcare providers to obtain accurate and up-to-date information.
