The major drawback to traditional insurance is its cost. Because there are few oversight or cost-saving measures, premiums for traditional insurance tend to be higher than for other kinds of plans. Traditional insurance is also expensive for employees, since most plans require costly deductibles and co-insurance with each visit. For more details, see The Ins and Outs of Traditional Health Insurance . HMO A health maintenance organization, or HMO, signs up doctors and hospitals into a network.
Employers pay a set fee per employee enrolled in the plan.
HMOs require its members to choose a primary care physician who performs basic health checkups and approves visits to other physicians. They generally only cover the expense of member visits to doctors and hospitals that are part of the network. Visits to nonparticipating doctors must be paid directly by the employee. This gatekeeper system represents both the best and the worst of HMOs. While this structure helps minimize costs for employers, it can be unpopular with some employees who currently use doctors outside the HMO network, since they must switch physicians to receive coverage.