How HMO Works and Meaning

How HMO Works and Meaning

An insurance company’s selection of health insurance coverage is typically restricted to a particular category of medical conditions. However, HMO plans simplify matters and increase the spectrum of benefits available to the scheme’s beneficiary.

In Nigeria, HMO stands for Health Management Organizations. Under the plan, these organizations are in charge of overseeing the delivery of common healthcare services via a network of hospitals. They act as a liaison between patients looking for medical care and the hospital.

How HMO works in Nigeria

Companies with at least five employees are HMO subscribers. Companies looking to provide healthcare services for their employees and their families might use the services of the Health Management Organization. The arrangement functions as follows:

  • The HMO company has a list of Healthcare service provider that can serve its clients (companies).
  • The HMO offers its services to companies seeking to provide healthcare for its employees. The services are offered under different product plans.
  • An agreement is made depending on the type(s) of HMO plan the company’s employees opt for including the premium attached to it.
  • The company agrees to pay the premium, which will cover the employees of the company based on their choice of products. Their choice of products is subject to the conditions of that plan for a stipulated time which is usually a year.
  • The employee selects a hospital from the list of healthcare service providers of HMOs like Hygeia HMO, Avon HMO, and so on.
  • When an employee or any person eligible under the HMO scheme falls ill, the hospital is liable to attend to the patient if that was the choice of the healthcare provider as well as other considerations.
  • The hospitals are often paid upfront regardless of whether the patient uses it or not.

Why is HMO a better option?

There are several reasons why you should choose an HMO plan instead of traditional health insurance, and they include the following

  • There is high coordination between the HMO provider, and the healthcare provider makes it easy for clients to access healthcare services
  • It is cheaper to maintain and easy to administer
  • Many HMO plans do not have deductibles
  • It is often the best choice in the case of emergency.

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What does the HMO premium cover?

HMO plans nearly always include coverage for all healthcare services, from routine checkups to major or minor surgery. Nevertheless, depending on the sort of plan you choose, there are limitations. Numerous HMO companies would classify their services into various categories, and the user would need to decide which plans worked best for them.

The services listed below are all covered by an HMO plan, among its many other advantages.

  • Ambulance Service
  • Dental care
  • Optical care
  • General Outpatient and in-house specialist consultation
  • Admissions
  • Accident and Emergencies
  • Prescribes Medicines and Drugs
  • Physiotherapy
  • Scans
  • Antenatal and childbirth
  • Minor Surgeries and procedures
  • X-rays, Laboratory & Diagnostic Test

However, not all of the plans provide the aforementioned services. For a specific time period, the services rely on the plan selection.

FAQS – Frequently Asked Questions

How to Apply for HMO in Nigeria?

To apply for Health Maintenance Organization (HMO) in Nigeria, you need to first,

  • Identify the HMO of your choice and then register with them by filling out an enrollment form.
  • You will need to provide your personal information, including your name, identity card, and contact information.
  • Once you have filled out the form, select the plan you are going for. Each HMO has a different plan that suits different needs.
  • You can go ahead to pay the plan fee, which varies from one HMO to another.
  • After payment, you will receive your HMO identification number, which you can present at any hospital accredited by your HMO for medical treatment.

You must select an HMO that meets your demands and budget because different HMOs provide various health plans.

Or if you work with a company, they will take care of the registration on your behalf. However, you are free to do it yourself and request that your provider remove the cost from your pay.

The steps are as follows:

  • Visit their office and go along with your personal information and work ID card.
  • Show evidence of salary payment like a payment slip for a period of 3 months.
  • Go along with your three months statement of account.
  • If you want to add your spouse under your plan, go along with your marriage certificate.
  • Fix an outstanding order with your bank to pay the insurance company monthly. Or you make a one time payment yourself.

Insurance Policies in Nigeria

Is HMO Compulsory in Nigeria?

Although HMO is not required in Nigeria, we advise you to purchase it for yourself and your family. Healthcare services are largely provided in Nigeria via Health Maintenance Organizations (HMOs).

HMOs coordinate and manage the provision of healthcare services by serving as a middleman between healthcare providers and those with health insurance.

They work to make sure that policyholders have access to high-quality healthcare and to make it easier for insurers and healthcare providers to settle claims.

It is significant to note that based on the type of insurance plan, the insurance provider, and other criteria, the precise specifications and requirements of health insurance coverage, including the participation of HMOs, may vary.

In order to receive correct and current information, it is advised to speak with the appropriate authorities, insurance companies, or healthcare providers.


A comparable HMO program for government employees and civil servants is also available, and it is overseen and administered by the National Health Insurance Scheme (NHIS).

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