What type of organization is characterized as a prepaid group health plan where members pay in advance for services?

The correct choice is HMO, which stands for Health Maintenance Organization. An HMO is a type of managed care organization that requires members to pay a fixed fee in advance, known as a premium, for a range of healthcare services. This prepaid model means that members typically have a network of doctors and healthcare providers from which they must choose to receive services, promoting preventive care and potentially reducing overall healthcare costs.

Members of an HMO benefit from this structure as it often leads to lower out-of-pocket expenses when seeking care, but it also means less flexibility in choosing healthcare providers compared to other types of plans. The focus of an HMO is on providing comprehensive care, maintaining the health of enrolled members, and emphasizing preventive measures.

Other options like PPOs (Preferred Provider Organizations) provide more flexibility in choosing healthcare providers and typically don't require members to choose a primary care physician, but they do not operate on a prepaid service model in the same way as HMOs. Insurance Exchanges serve as marketplaces for individuals to compare and purchase different types of insurance plans but don’t fit the prepaid group model. Direct Primary Care is a model where patients pay a monthly fee directly to their healthcare provider for a range of services, but it's not a group organization like an HMO