You are here: Home Insurance Health Insurance: ... The History Of HMOs
Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
Information about all aspects of health care from choosing a doctor and treatment, staying safe in a hospital, to end of life care. Includes how to obtain, choose and maximize health insurance policies.
Answers to your practical questions such as how to travel safely despite your health condition, how to avoid getting infected by a pet, and what to say or not say to an insurance company.

Health Insurance: HMOs (Managed Care Policies)

The History Of HMOs

Next » « Previous


When HMOs were first started in the middle of the last century in California, they were called Pre-Paid Health Plans. HMOs were used as a way to help attract miners to the fields by providing "cradle-to-grave" health care for a set fee by the company's doctors in the company's health facilities.

The current popularity of HMOs in the United States traces back to the 1970s and 1980s when costs of medical care spiraled out of control under the traditional "indemnity" model of health insurance then in effect.

In response, the insurance companies turned to Managed Care.

The first extensive use of Managed Care in the U.S. was in the form of adding PreCertification to indemnity health insurance policies. Doctors and hospitals were required to "pre-certify" non-emergency hospital admissions and certain, expensive out-patient procedures before they were performed. The insurance company then determined if the proposed care was appropriate and necessary. If so, the company authorized the treatment. If not, the company was able to state before the care was given that it would not be paid for by the insurance company.

PreCertification was used mainly to reduce unnecessary or unnecessarily long hospital confinements.

The next logical step was the move to HMOs.

The move to HMOs was helped by the federal government. The Health Management Organization Act of 1973 ("HMO Act") required that an employer offering health insurance must include an HMO type policy as part of its insurance program.

Please share how this information is useful to you. 0 Comments


Post a Comment Have something to add to this topic? Contact Us.

Characters remaining:

  • Allowed markup: <a> <i> <b> <em> <u> <s> <strong> <code> <pre> <p>
    All other tags will be stripped.