Which statement best describes Health Maintenance Organization (HMO)?

• A. An insurance arrangement that charges a deductible and pays related costs after.
• B. A prepaid fixed fee for comprehensive health services.
• C. Fees charged per service with no prepaid plan.
• D. Emergency services only with no ongoing coverage.

Answer: (B)

Health Maintenance Organizations are a managed care approach that operates on prepaid coverage for a broad range of services through a network of providers. Members pay a fixed prepaid amount (often a monthly premium) to access comprehensive health services, with care typically coordinated by a primary care physician and needing referrals for specialists. This structure emphasizes cost control and preventive care, and most services are covered only when obtained within the network (except in emergencies).

So, describing an HMO as a prepaid fixed fee for comprehensive health services best captures how this model pays for and delivers care: you pay ahead of time for access to a wide set of services through network providers. The other options describe different payment models—deductibles with post-service payment, fee-for-service without prepaid plans, or coverage limited to emergencies—which do not describe how HMOs are structured.