California Life and Health Insurance Practice Exam

A Health Maintenance Organization (HMO) is a type of healthcare provider that offers both healthcare services and insurance coverage in a coordinated manner. HMOs operate on a model that requires members to choose a primary care physician (PCP). This PCP becomes the main point of contact for all healthcare needs and is responsible for referring patients to specialists within the network when necessary. The HMO structure helps to control costs and streamline patient care by promoting preventative services and managing the referrals and treatments that members receive.

Additionally, because HMOs combine both insurance coverage and the provision of healthcare services, they typically emphasize the importance of using network providers and may require patients to obtain prior authorization for certain services. This integrated approach can help ensure that care is more cost-effective and comprehensive, emphasizing preventative measures.

In contrast, options like PPOs, EPOs, and POS plans do provide various levels of care and can have different structures regarding networks and referrals, but they do not operate with the same level of integration of both healthcare delivery and insurance provision as an HMO does.