What is a Health Maintenance Organization (HMO)?

A Health Maintenance Organization (HMO) is characterized by its structure, which emphasizes a network of healthcare providers. Members of an HMO are required to receive their care from a specific network of doctors and hospitals, which usually leads to lower out-of-pocket costs compared to plans that allow for more flexibility in choosing care providers.

This requirement encourages members to utilize preventative services, as the HMO model prioritizes overall health management and wellness. By working within a defined network, HMOs can effectively control costs and focus on coordinated care, offering a more integrated approach to healthcare access.

The other options do not accurately capture the essence of what an HMO is. For example, a health insurance provider without a network would suggest a more flexible arrangement, while a life insurance policy with health benefits does not align with the concept of an HMO at all. Additionally, an organization focused solely on health research does not pertain to the health plan structure that HMOs represent. Therefore, the emphasis on using network providers correctly identifies the fundamental nature of an HMO.