In an HMO, which describes how members typically pay for coverage?

• A. Subscribers pay a flat monthly fee in exchange for access to medical services
• B. Care is provided only by specialists
• C. Members are reimbursed on a fee-for-service basis
• D. Preventive care is not covered

Answer: (A)

Prepaid funding is the hallmark of HMOs. Members pay a fixed monthly premium to the HMO to access a network of providers, often with small copays, rather than paying for each service after it’s received. Providers are paid a set amount per enrollee (capitation) to coordinate care, which keeps services within the network and emphasizes preventive care. This contrasts with fee-for-service plans, where reimbursement happens for each service rendered after the fact. Because of the prepaid, network-based approach, preventive care is typically covered. Statements suggesting care is provided only by specialists or that preventive care isn’t covered don’t fit how HMOs operate.