Alternative means of health care in which people or their employers are charged a set amount and the HMO provides health care and covers hospital costs.

• A. Health Maintenance Organization (HMO)
• B. Private health insurance
• C. Affordable Care Act
• D. Preffered Provider Organization (PPO)

Answer: (A)

This describes a Health Maintenance Organization. In an HMO, people or their employers pay a fixed amount per month or per enrollee, and the HMO coordinates and pays for most of their health care through a network of providers. Care is centralized and usually requires using in-network doctors and obtaining referrals from a primary care physician for specialists. The focus on capitation (the fixed payment) and on providing and covering care within a network is what makes this model distinct from fee-for-service private insurance or PPOs, and it’s different from legislation like the Affordable Care Act.