HMO (Health Maintenance Organizations) is no longer a new concept in Nigeria, having been around for a while. It is basically an arrangement where an employer buys health cover for its employees for a period of time usually a calendar year. Typically, a card is issued to the employee and by extension to his family – wife, four children and sometime two dependent relatives. In case of illness, the employee or his relatives can visit a specified hospital or any hospital in case of emergency. The employee is not expected to pay on such instances, but the medical bills will rather be on the account of the HMO company who already has in place a settlement arrangement with the hospital. This looks like a decent process that should not have any issue. However, with difference instances of people dying because they were denied treatment on the account of their illness not covered by HMO plan, it is important to understand the concept and look also at what could be wrong.

HMO plans are like pay-tv bouquets. There are different bouquets available and although the service providers (HMO company) would want all its subscribers to be on its highest bouquet which offers premium services, subscribers for reasons like affordability and need would sometimes rather go for other lower bouquets. This implies that the subscribers chose what plans they feel is good for them. Like every other contract where terms and conditions apply, each bouquet will carry its own coverage terms and conditions which if breached may render the contract void. By accepting the terms and conditions, it is implied that the subscribers fully understand the terms and agree to be bound by them.

HMO companies are in business with intention to increase the owners’ wealth therefore profit is a major motive. They make this profit the insurance way which is to collect premium/subscription from companies on behalf of their employees to provide medical treatment in case of illness with the hope that they will pay for the treatment of few from the contribution of many. Whatever margin is left is what they factor in their operating expenses with the hope of still making some profit. HMO arrangement is a game of number, therefore HMO companies generally do not sell covers to individuals but rather to corporates. This sometimes could be a challenge because individuals will not be able to buy the desired covers directly and organizations who are naturally looking for a way to cut their costs sometimes at all cost, will buy the minimum of covers for their employees.

Since the HMO contract is an agreement between an employer and the HMO company, employees who are the beneficiary of the contract do not directly have a say. In most cases, corporations already have a budget for staff medical expenses for the year, so when they bring the HMO application form for employees to fill, they have already agreed with the HMO company on the plan they are buying regardless of the plan chosen by the employees. Lot of times, the plan is cadre and status based i.e. a graduate trainee may be on the basic plan while senior managers will be on a higher plan. By implication, the graduate trainee will most likely complain that he was not treated for a particular illness while his manager is treated for the same illness.

Each subscriber consisting of about six people is entitled to a maximum limit regardless of how many people finished the limit. For instance, if the maximum limit is N200,000 for a family of six, it could be exhausted by just one or two people. This means that other members of the family will bear their expenses in case of illness. HMO is designed for outpatients only i.e. it does not cover hospitalization but rather treatment where patients return home same day. . In recent times however, some service providers are becoming more creative with plans that provide hospitalization. It is important to note that some illnesses are typically exempted, therefore subscribers should find out their maximum limit, what is covered and what is not.

…to be continued

Remember, Premium is the token paid to buy certainty when uncertainties happen. – Be Insured Naija

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