Medically reviewed by Elizabeth Mbata, MD. Last reviewed July 2026.
If you are comparing health plans, you have probably seen the term HMO. An HMO, or Health Maintenance Organization, is one of the most common types of health plan, known for lower costs in exchange for less flexibility. Here is what an HMO is, how it works, and how it compares to other plans, so you can decide whether it fits your needs.
What an HMO Is
An HMO is a health plan that generally covers care only from doctors and hospitals in its network, except in emergencies. In return for staying in network and following its rules, an HMO usually has lower monthly premiums and lower out-of-pocket costs than more flexible plans. HMOs emphasize coordinated, preventive care, and they typically require you to live or work in their service area.
How an HMO Works
Two features define the HMO experience. First, you choose a primary care physician, or PCP, who serves as your main doctor and coordinates your care. Second, to see a specialist, you usually need a referral from your PCP. This gatekeeper model keeps care coordinated and costs down, but it means you cannot simply book any specialist directly. If you go outside the network without authorization, the plan generally will not pay, except for emergency and urgent care.
HMO Compared to Other Plans
It helps to see the HMO alongside the main alternatives. A PPO lets you see any provider without referrals and covers out-of-network care at higher cost, offering the most flexibility for a higher price. An EPO is like an HMO in covering only in-network care, but usually without requiring referrals. A POS plan blends the two, using a PCP and referrals like an HMO but allowing some out-of-network care like a PPO. In short, HMOs trade flexibility for lower cost.
Who an HMO Suits
An HMO can be a good fit if you want lower premiums and predictable costs, are comfortable using a primary care doctor to coordinate your care, and mostly use providers in one area. It may be less ideal if you want to see specialists directly, travel frequently and need out-of-network coverage, or have established doctors outside the plan network. Weighing how you actually use care helps you decide.
Questions to Ask Before Choosing an HMO
Before enrolling, check a few things. Confirm that your preferred doctors and hospitals are in the network, since that is the biggest factor in whether an HMO works for you. Understand the referral process for specialists and how quickly you can get one. Check the premium, deductible, copays, and out-of-pocket maximum so you know your real costs. And verify the service area, since coverage away from home may be limited to emergencies. Answering these questions up front prevents surprises later.
Keeping Costs Down With an HMO
To get the most from an HMO, build a good relationship with your primary care physician, who is your entry point to the whole system and can handle much of your care directly. Always confirm a provider is in network before an appointment, since out-of-network care is generally not covered. When you need a specialist, ask your PCP to process the referral promptly so care is not delayed. And use the plan preventive services, which are typically covered at no cost, since HMOs emphasize keeping you healthy. Following the plan rules is what keeps an HMO both affordable and smooth to use.
HMO FAQs
HMOs generally have lower premiums and out-of-pocket costs than PPOs, in exchange for network restrictions and referrals, though exact prices vary by plan.
Can I keep my current doctor with an HMO?
Only if that doctor is in the HMO network. Check before enrolling, since out-of-network care is generally not covered.
What happens in an emergency?
Emergency and urgent care are covered even out of network, so you can seek emergency care anywhere.
What does HMO stand for?
Health Maintenance Organization, a health plan that generally covers only in-network care and uses a primary care doctor.
Do I need a referral with an HMO?
Usually yes. You typically need a referral from your primary care physician to see a specialist.
Does an HMO cover out-of-network care?
Generally no, except for emergency and urgent care. Non-emergency out-of-network care is usually not covered.
Because you agree to stay in network and coordinate care through a primary doctor, which lowers costs.
What is the difference between an HMO and a PPO?
A PPO lets you see any provider without referrals and covers out-of-network care at higher cost, offering more flexibility.
Is an HMO a good choice?
It can be, if you want lower costs and are comfortable using a primary care doctor and staying in network.
References
HealthCare.gov glossary: healthcare.gov
HealthCare.gov Marketplace: healthcare.gov
HealthCare.gov, plan types: healthcare.gov
Medicare.gov: medicare.gov
Programs, eligibility, and funding status change frequently. Verify each programās current status directly before applying.
