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Kids and Health Care: HMOs

A health maintenance organization is a form of managed care and consists of a network of doctors and hospitals that provide comprehensive health care services to their members for a fixed periodic payment, usually monthly. As a result, the HMO is both the insurance company and the health care provider.

HMOs were formed to control skyrocketing medical costs and provide preventative health care before members got sick. (It's a lot less expensive to pay for hypertension medication than a heart transplant, after all.) They keep costs down by getting hospitals, doctors and other medical personnel to join the HMO. These providers offer health care to the HMO members in return for a pre-paid monthly charge. So, you can go to the provider as often as you want for the same monthly premium -- plus an additional small fee (or copayment) per office visit or per prescription. Most other medical services are fully covered by an HMO, such as hospital stays.

However, in exchange for lower premiums, you give up your freedom of choice (unless, of course, your doctor is part of the HMO and listed as your primary physician). If you see a doctor who's not part of the plan, you'll usually have to pay the whole bill yourself. This is a strong incentive to see only providers within the HMO.

(Some HMOs have added options to their plans that allow you to see a doctor of your choice who is out of network -- and get some coverage. But this coverage is still very limited.)

A key point with regard to gatekeeper physicians: In most cases, specialists are not allowed to be gatekeepers; but pediatricians are one of the few regular exceptions to this rule. In most plans, you can use any participating physician as your children's primary provider. (The most common alternatives: general practitioners and family-medicine specialists.) In most cases, this exception is something you should take full advantage of. While it requires some paperwork to change your kids' primary physician, you can usually do this with a standard form that you send by e-mail or fax.

In most cases, the managed care plan doesn't limit the number of times you can change primary providers -- so, take your kids to every pediatrician in the plan until you decide which you like best.

Many HMOs and other managed care plans require members to make a copayment when they get treatment. A copayment is a specific dollar amount, or percentage of the cost of a service that you must pay in order to receive a basic health care service.

Copayments are rarely more than $10 -- but they are due every time you visit a health care provider.

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