Life & Health Insurance Exam (National Portion)Health InsuranceMedium
An employer offers a group health plan where employees must choose a Primary Care Physician (PCP) within the plan's network and obtain referrals from the PCP to see specialists. This plan also emphasizes preventative care and managing healthcare costs. What type of managed care plan is this?
- AHealth Maintenance Organization (HMO)
- BPreferred Provider Organization (PPO)
- CPoint of Service (POS) plan
- DIndemnity plan
Show answer & explanationAnswer & explanation
Correct answer: A. Health Maintenance Organization (HMO)
The requirement to choose a PCP and obtain referrals for specialists, along with an emphasis on preventative care and cost management, are hallmark characteristics of a Health Maintenance Organization (HMO). PPOs allow more flexibility, POS plans combine features, and indemnity plans are fee-for-service.
Why the other options are wrong
- B. PPOs typically do not require a PCP referral to see specialists, offering more flexibility.
- C. POS plans combine aspects of HMOs and PPOs, often allowing out-of-network care at a higher cost without a referral, unlike this scenario.
- D. Indemnity plans are traditional fee-for-service plans with no network restrictions or PCP requirements.
Health Maintenance Organization (HMO)
A type of managed care health insurance plan that provides healthcare services through a network of doctors and hospitals for a fixed monthly premium, typically requiring a Primary Care Physician and referrals for specialists.
- Requires PCP selection.
- PCP referrals for specialists.
- Focus on preventative care.
Memory trick: Managed Care: Network Nudge!