Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceEasy
A client is seeking a health insurance plan that offers the lowest possible premiums and requires them to select a Primary Care Physician (PCP) within a network. This PCP then acts as a gatekeeper for all other specialized services. Which type of plan best fits this description?
- APoint of Service (POS)
- BExclusive Provider Organization (EPO)
- CPreferred Provider Organization (PPO)
- DHealth Maintenance Organization (HMO)
Show answer & explanationAnswer & explanation
Correct answer: D. Health Maintenance Organization (HMO)
HMOs typically offer lower premiums in exchange for more restrictive network usage and the requirement of a Primary Care Physician (PCP) referral for specialists, acting as a gatekeeper.
Why the other options are wrong
- A. POS plans combine elements of both HMOs and PPOs, allowing out-of-network care at a higher cost, and generally have higher premiums than HMOs.
- B. EPOs require members to stay within a network for coverage but often do not require PCP referrals for specialists, and may have higher premiums than HMOs.
- C. PPOs offer more flexibility in provider choice, including out-of-network options, but usually have higher premiums.
Health Maintenance Organization (HMO)
A type of managed care health insurance plan that requires members to choose a Primary Care Physician (PCP) within its network and obtain referrals for specialist care.
- Lower premiums compared to PPOs.
- Restricted network of providers.
- PCP acts as a 'gatekeeper' for specialist referrals.
Memory trick: HMOs are 'Home-based Medical Options' with a gatekeeper.