This Blog Was Updated In June of 2022

No matter where you live, having affordable and reliable health insurance coverage is essential.

In California, there are a wide variety of choices and several providers that offer health insurance options to residents. These might be offered to you through your employer or, depending on your work and employment status, you might have to purchase your own coverage.

The bottom line is that everyone should have health coverage and the specific type of insurance should be the best fit for your age, overall health, and ability to pay.

And one of the most common types of plans in California is the Health Maintenance Organization, or HMO, plan.



Health insurance coverage and the several types of plans offered can be a confusing subject for many people. In addition to the rules and stipulations of each insurance provider, individual states have their own regulations regarding health insurance coverage, as well.

A simple definition of a health maintenance organization is provided by HealthCare.gov:

A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage.

Among the diverse types of health insurance plans offered, the HMO and the PPO, or preferred provider organization, are the most common. The major distinction between them is that unlike an HMO a PPO plan allows patients to choose any physician they wish, either inside or outside of their network.

However, HMOs offer several advantages for members including low or no premiums, lower out-of-pocket costs, and lower copayments.



Certain rules stemming from legislation passed by the state of California impact how HMOs must operate in California.

For example, one law firm website noted that,

“The Regulations require that patients be treated by HMO doctors within 10 business days of requesting an appointment, and by specialists within 15. Patients seeking urgent care that does not require prior authorization must be seen within 48 hours. In addition, telephone calls to doctors’ offices will have to be returned within 30 minutes, and physicians or other health professionals will have to be available 24 hours a day.”

As one workforce company reported, other legislation mandating certain aspects of coverage by HMOs in California include:

  • Health plans must continue to cover a terminated or nonparticipating provider’s services for women undergoing mental health treatment during or up to one year after a pregnancy.
  • Insurers must cover out-of-network air ambulance services as in-network services. Individuals can’t be charged more than the in-network cost-sharing amount, which must count toward the deductible and annual out-of-pocket maximum.
  • HMOs must cover telehealth services to provide parity with in-person services under health plans issued on or after Jan. 1, 2021. A plan must provide telehealth coverage on the same basis and to the same extent as coverage for in-person diagnosis, consultation, or treatment.
  • HMOs in California must provide standard fertility-preservation services when surgery, radiation, chemotherapy or another necessary medical treatment affecting reproductive organs or processes may directly or indirectly impair fertility.



One of the primary draws of an HMO plan is the comparable cost.

An HMO is generally able to offer lower premiums than other types of health insurance plans while retaining a high quality of care from its network. In addition to low premiums, there are typically low or no deductibles with an HMO.

Instead, the organization charges a co-pay for each clinical visit, test, or prescription. These HMO co-pays are typically low, often in the range of $5, to $20 per service, which helps minimize a member’s out-of-pocket expenses and makes HMO plans affordable for families and employers.

The bottom line here is that the primary advantage of choosing an HMO is the low cost. They feature fixed premiums on a monthly or annual basis that are lower than traditional forms of health insurance. These plans tend to come with low or no deductibles and your co-pays are generally lower than those of other plans. In addition, any out-of-pocket costs will also be lower for prescriptions.

The quality of care with an HMO is generally higher partly because members are encouraged to get annual physicals and to seek out treatment early.



As with any available health insurance plan, there are some downsides or disadvantages to choosing an HMO for your coverage.

Here are the main ones:

Medical professionals must be part of the plan’s network.

You must choose a primary care doctor who will be responsible for your healthcare needs, including referrals, and the doctor must be part of the network. You are responsible for any costs incurred if you see a medical professional out of the network, even if there’s no network doctor in your area.

In addition, members are “assigned” to a primary care physician (PCP) but if the managed care plan changes, then the member may not be able to continue with that same PCP.

You can only see a specialist with a referral from your primary care doctor.

Referrals for any specialists are required if you want your HMO to pay for these visits. That means if you need to visit a gynecologist or a dermatologist, for example, your primary doctor must make a referral for the plan to pay for your visit. Otherwise, you will be responsible for the entire cost.

Services provided may be limited.

In many HMO plans, medical services are limited to what the policy deems as being medically necessary. Also, members are usually must confirm what services will be covered before their appointment.

Emergency room visits must meet certain conditions before the plan pays.

There are specific conditions that you must meet for certain medical claims, including emergency room visits. Typically, the HMO has strict definitions of what constitutes an emergency and if your condition doesn’t meet those criteria, then the HMO plan won’t pay.



Ranking or rating health insurance plans is partly subjective when factoring in patient reviews and member satisfaction surveys and so forth. The scoring process is also partly objective, as well, since information such as average member copayments, premiums, and out-of-pocket costs can be accurately determined.

And when it comes to finding which HMO plan is the best, the rankings can differ based on the preferred criteria used.

For example, according to the website at ValuePenguin, the cheapest Silver plans available in Northern California are found with Kaiser Permanente (Alameda County – Silver 70 HMO) and Anthem Blue Cross in Amador, Butte, and Calaveras Counties for the Silver 70 EPO plans.

According the most recent annual rankings from National Committee for Quality Assurance (NCQA), the top three rated HMOs serving members in Northern California are:

  1. Kaiser Foundation Health Plan of Northern California
  2. UnitedHealthcare of California
  3. Western Health Advantage

The state of California’s Office of the Patient Advocate Quality Ratings Summary ranked the HMOs serving Northern California with Kaiser Foundation Health Plan of Northern California ranking at the top of a list of HMO providers including:

  • Aetna Health of California, Inc.
  • Anthem Blue Cross
  • Blue Shield of California
  • CIGNA Health Net of California, Inc.
  • UnitedHealthcare of California
  • Western Health Advantage

These six HMOs were all rated as “GOOD”, in both the Quality of Medical Care and Patient Rate Overall Experience categories.

Kaiser Permanente, however, ranked “EXCELLENT” in the Quality of Medical Care and “GOOD” in the Patient Rate Overall Experience category, edging out the competition by a small margin. Consequently, while many of the criteria used to rate and rank the available HMO providers in California are subjective to some degree, Kaiser Permanente can be said to be the “best” HMO insurance provider.

In addition to overall costs, availability of doctors and services, and quality of medical care, your own experience and treatment preferences must be factored into any assessment of HMO providers.




The bottom line when it comes to finding the “best” HMO plan is that much of what makes any plan better than another are the requirements of the individual seeking the plan. There are a wide variety of HMO plans available in California, and there are a wide variety of individuals whose budgets, demographics, and health needs are unique and different from most everyone else.

That being said, as one recent article has summed it up,

“California’s Office of the Patient Advocate released a report card ranking the state’s best and worst health plans based on quality care and patient satisfaction. Some of the key takeaways include:

  • Kaiser Permanente’s HMO plans in Northern and Southern California each received the maximum four-star rating, indicating the plans’ quality performance metrics were comparable to the top 90 percent of health plans across the country.

  • The majority of the remaining plans received three stars, including Anthem Blue Cross, Blue Shield of California, Cigna, Health Net of California, Sharp Health Plan and Western Health Advantage.

  • Aetna Health of California was the only HMO plan to receive one star.”



J.C. Lewis Insurance has been a local, family-owned firm based in Sonoma County since 1979, and our team of expert brokers offers individual and family dental insurance plans.

In addition, we provide small business and individual health insurance plans from only the leading health insurance carriers that are licensed to do business in California.

In addition to being experienced, professional brokers, we are licensed and certified by each of these insurance carriers to offer coverage to individuals, families, and small group employers in addition to Medicare supplemental and prescription drug plans for seniors.

When you’re shopping for vision, dental, or health insurance for your employees, or for you and your family, you probably have several questions and concerns.

At J.C. Lewis Insurance Services we welcome your questions about insurance coverage and you can be confident that we will help you find the right solution.