Final answer:
Every HMO subscriber must receive a benefits package that includes the HMO contract, certificate, and a description of covered services. These materials outline the medical services covered, deductibles, copayment amounts, and other plan details such as covered medications and provider networks.
Step-by-step explanation:
When an individual becomes a subscriber to a Health Maintenance Organization (HMO), they are typically provided with a benefits package. This essential package includes important documents like a copy of the HMO contract and the certificate of coverage. In addition to these documents, subscribers must receive a description of covered services included in the HMO plan. This description outlines what medical services are included under the scope of the HMO coverage and may also detail the HMO subscribers’ responsibilities, such as deductibles and copayment amounts.
HMOs operate on a pre-paid basis, where the providers are compensated a fixed amount per enrollee, regardless of how many or few services an individual uses. This is contrary to a fee-for-service model where providers bill for each service rendered. The HMO model encourages efficient resource use and seeks to provide preventive care to keep costs down for the organization and, presumably, the patient. One of the challenges that HMOs and other insurance models face is adverse selection, a scenario where individuals with greater health risks are more likely to purchase insurance, potentially leading to higher costs for the insurer.
Subscribers must also be aware of their HMO plan's network of providers and whether services rendered outside this network are covered. Medications covered under the plan, often referred to as a formulary or a list of covered medications, along with various other plan specifics such as exclusion lists, care coordination procedures, and wellness benefits, are important features that are usually detailed in the benefits documentation provided to new enrollees.