Covered California Certified Enroller Practice Exam

What does HMO stand for?

1. Health Maintenance Organization

2. Health Management Option

3. High Market Organization

4. Health Member Organization

The correct answer is: Health Maintenance Organization

HMO stands for Health Maintenance Organization. This term refers to a type of managed care organization that provides health insurance coverage to members through a network of doctors and hospitals. The key feature of HMOs is that they typically require members to choose a primary care physician (PCP) who coordinates their healthcare and refers them to specialists within the network when necessary. This structure helps to control costs and ensure that patients receive preventative care, which is a primary focus of HMOs. The primary goal of an HMO is to provide a range of health services to its members while controlling healthcare costs. Consequently, services are often provided at a lower out-of-pocket expense to the member in exchange for a commitment to use the HMO's network of providers. Understanding the function and structure of HMOs is crucial for anyone studying health insurance systems, as it reflects how healthcare delivery is organized and financed within this model.