Which statement best defines a Health Maintenance Organization (HMO)?

• A. A health care system that is responsible for both the financing and delivery of a broad range of health care services.
• B. An insurer that pays only for emergency care.
• C. A plan that reimburses on a pure fee-for-service basis with no networks.
• D. A program that covers only dental and vision services.

Answer: (A)

An HMO is a managed care arrangement that provides and pays for a wide range of medical services through a network of providers. Members enroll in a plan that typically uses a fixed prepaid premium, and most care must be obtained from in-network doctors and hospitals. A primary care physician usually acts as the gatekeeper, coordinating care and approving referrals to specialists, which helps control costs and ensure appropriate treatment. The emphasis is on preventive care and keeping costs predictable for members, with limited out-of-network access except in emergencies.

This fits because HMOs are defined by combining both financing and delivery of a broad set of services within a network, rather than paying only for emergencies, using a pure fee-for-service model with no networks, or offering only dental and vision benefits.