Life & Health Insurance Exam (National Portion)Health InsuranceEasy
An employer offers a group health plan where employees must choose a Primary Care Physician (PCP) from a network, and referrals are generally required to see specialists. This plan emphasizes preventative care and cost control. What type of managed care plan is this?
- AHealth Maintenance Organization (HMO)
- BPreferred Provider Organization (PPO)
- CExclusive Provider Organization (EPO)
- DPoint-of-Service (POS)
Show answer & explanationAnswer & explanation
Correct answer: A. Health Maintenance Organization (HMO)
Health Maintenance Organizations (HMOs) are characterized by requiring members to choose a PCP, who acts as a gatekeeper for referrals to specialists, and a strong emphasis on preventative care.
Why the other options are wrong
- B. PPOs allow members to see specialists without a referral and typically offer more flexibility outside the network, albeit at a higher cost.
- C. EPOs operate similarly to HMOs in terms of network restrictions but usually do not require referrals for specialists within the network.
- D. POS plans combine aspects of HMOs and PPOs, allowing members to go out-of-network with higher cost-sharing.
Health Maintenance Organization (HMO)
A type of managed care health insurance plan that provides healthcare services through a network of providers, requiring members to choose a Primary Care Physician (PCP) and often needing referrals for specialists.
- Requires a Primary Care Physician (PCP).
- Referrals typically needed for specialists.
- Strong emphasis on preventative care.
- Members must stay within the network for coverage (except emergencies).
Memory trick: Managed care is about managing your choices: do you need a gatekeeper or freedom?