Health Maintenance Organization (HMO) Plans Explained

Final answer:

HMO Plans Explained

Prepaid health insurance plans that incorporate the provision of coordinated health care services and cost-containment measures to monitor and manage health care services provided to members of the plan are called Health Maintenance Organizations (HMOs).

With an HMO, you choose a primary care doctor who coordinates most of your care, but HMO's usually only pay for care within their specified network of providers. HMO plans typically offer lower monthly premiums and out-of-pocket costs, enrolling subscribers often through their workplaces.

In contrast, Preferred Provider Organizations (PPOs) offer more flexibility to use providers both in and out of the network without a referral but tend to have higher monthly premiums and out-of-pocket medical costs.

The Point of Service (POS) plans allow you to decide between an HMO or a PPO each time you need care. These managed care plans all vary in terms of cost, flexibility, and choice of providers.