Which statement describes a Health Maintenance Organization (HMO)?

Which statement describes a Health Maintenance Organization (HMO)?

• A. Requires lower co-payments but gives patients restricted access to out-of-network physicians.
• B. Requires higher co-payments but allows out-of-network access
• C. No co-pays and universal access
• D. Only covers hospital services

Answer: (A)

HMOs control costs by limiting members to a specific network of providers and using a primary care physician as a gatekeeper to coordinate all care. This structure typically results in lower co-payments for many services, but it also means access to care outside the network is restricted and out-of-network services are usually not covered except in emergencies. That combination—lower out-of-pocket costs with restricted network access—defines an HMO. Choices that imply no co-pays or universal access don’t fit HMOs, and those suggesting higher co-pays for out-of-network care describe another type of plan. Also, HMOs cover more than just hospital services, including routine physician visits and preventive care.

HMOs control costs by limiting members to a specific network of providers and using a primary care physician as a gatekeeper to coordinate all care. This structure typically results in lower co-payments for many services, but it also means access to care outside the network is restricted and out-of-network services are usually not covered except in emergencies. That combination—lower out-of-pocket costs with restricted network access—defines an HMO.

Choices that imply no co-pays or universal access don’t fit HMOs, and those suggesting higher co-pays for out-of-network care describe another type of plan. Also, HMOs cover more than just hospital services, including routine physician visits and preventive care.