What differentiates an HMO from a PPO?

An HMO, or Health Maintenance Organization, is characterized by its requirement for members to select a primary care physician (PCP). This PCP serves as the main point of contact for all healthcare needs and is responsible for coordinating all care within the HMO network. Members must go through their PCP for referrals to see specialists, making the process more centralized and typically simpler.

This structure promotes a more managed and preventive approach to healthcare, often leading to lower costs for members due to the agreements that HMOs have with network providers. Therefore, the requirement of having a primary care physician is fundamental to the way HMOs operate and is a key distinction from other plan types, such as PPOs (Preferred Provider Organizations), which offer more flexibility in choosing healthcare providers without the need for a referral.

In the context given, the other options reflect features of PPOs or general misconceptions about how these plans operate, but they do not accurately describe the defining characteristics that separate HMOs from PPOs.