What Does HMO Health Insurance Cover? 
HMO 's cover the same medical services that traditional major medical insurance plans , either group or individual cover . The essential difference is in the provider network used to deliver these benefits and how the subscriber 's access to their benefits is guided by this approach . HMO stands for Health Maintenance Organization and while there are variations on the theme , in its purest form an HMO has an exclusive network of contracted providers that must be used by subscribers to the HMO in order to receive covered services . In this context an HMO would not pay for services a member receives from a non-HMO provider . Also , HMO 's often use a `` gatekeeper '' approach that requires a referral from a Primary Care Physician before the member can receive care from a specialist or other HMO provider for non-emergency services . Theoretically the HMO concept assures that your Primary Care Physician is overseeing the member 's complete range of health care services and treatment , makes sure that care is being delivered in the most appropriate and cost effective setting and manner , and maximizes the overall efficiency of the delivery of health care to its members . In practical terms the HMO concept has generally fared best in higher population density areas that have an extensive and competitive medical infrastructure in place . One of the main reasons for this is that the HMO providers can actually be employees of the HMO or have negotiated deep discounts for their services with the HMO in exchange for a high volume of patient traffic . Accomplishing this in a metropolitan area like Los Angeles is far easier than in a rural area where there may be not be many competing providers and hospitals and these providersare already serving virtually all of the area 's population . Also , the more restrictive and controlling nature of the HMO concept has not always been welcomed by the American consumer who has been accustomed to making their own choices when it comes to selecting their doctors , hospitals and pharmacies and having a high degree of freedom in when and where they access the health care system . While HMOs can deliver excellent benefits and services at attractive rates , the potential consumer should also consider the trade offs involved in achieving these ends . If the consumer finds the HMO network to be sufficient for their perceived needs and understands therules of being an HMO member it can be a very positive environment in which to receive one 's health care . Going into an HMO without understanding and accepting these factors can lead to a very unsatisfactory and perhaps costly experience . 