Which statement describes a Health Maintenance Organization (HMO) in health care terms?

Which statement describes a Health Maintenance Organization (HMO) in health care terms?

• A. It is a prepaid plan offering comprehensive health services for a fixed fee
• B. It primarily pays after services are rendered
• C. It is a form of auto insurance
• D. It only covers catastrophic medical events

Answer: (A)

An HMO is a prepaid health plan that provides a broad range of services for a fixed fee, usually through regular payments and capitated payments to network providers. Care is coordinated by a primary care physician who acts as a gatekeeper and referrals to specialists are typically limited to in-network providers. Because it’s prepaid, members don’t pay for each individual service at the time of care; the plan covers most services for the fixed fee. The other descriptions describe fee-for-service payment after care, auto insurance, or catastrophic-only coverage, which don’t fit the prepaid, comprehensive, network-based model of an HMO.

An HMO is a prepaid health plan that provides a broad range of services for a fixed fee, usually through regular payments and capitated payments to network providers. Care is coordinated by a primary care physician who acts as a gatekeeper and referrals to specialists are typically limited to in-network providers. Because it’s prepaid, members don’t pay for each individual service at the time of care; the plan covers most services for the fixed fee. The other descriptions describe fee-for-service payment after care, auto insurance, or catastrophic-only coverage, which don’t fit the prepaid, comprehensive, network-based model of an HMO.