Arkansas Life and Health Insurance Practice Exam

Which of the following health plans will only cover losses by an approved provider?

1. HMO

2. PPO

3. POS

4. HDHP

The correct answer is: HMO

An HMO (Health Maintenance Organization) is a health plan that will only cover losses by an approved provider. HMOs usually require members to choose a primary care physician (PCP) from a network of doctors and to get referrals from their PCP to see specialists. This system helps control costs and ensures that members receive care from approved providers within the network. The other options: - PPO (Preferred Provider Organization) allows members to see both in-network and out-of-network providers, with different levels of coverage for each. - POS (Point of Service) plans offer lower costs for using in-network providers but still provide some coverage for out-of-network providers, giving members more flexibility. - HDHP (High Deductible Health Plan) is a type of health insurance plan with higher deductibles and lower premiums than traditional insurance plans. While HDHPs may have preferred provider networks, they do not restrict coverage to only approved providers within the network.