Accident & Health FundamentalsQuestion 11 of 716
A key structural difference between a traditional HMO and a Preferred Provider Organization (PPO) is that the HMO:
a.Requires a primary care physician (PCP) to coordinate care and generally has no out-of-network benefits except emergencies
b.Always pays 100% of covered charges without any deductible, copayment, or coinsurance from the member
c.Is regulated solely by federal Medicare rules rather than by any California insurance or managed-care statute
d.Allows members to see any specialist nationwide with no referral, and pays the same benefit in or out of network
Explanation
A core HMO feature is the gatekeeper PCP who coordinates and authorizes referrals to specialists. HMOs typically only pay for in-network care, with emergencies as the main exception. PPOs allow direct access to specialists and pay reduced benefits for out-of-network care.
Law Reference: Plan design – HMO vs. PPOThis topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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Related questions on this topic
- Under the ACA, a group health plan that offers dependent coverage must make that coverage available to an enrolled employee's adult child until the child reaches age:
- Which of the following is NOT one of the ten Essential Health Benefits categories that an ACA-compliant individual or small group plan must cover?
- A health plan has a $2,000 deductible, 20% coinsurance, and a $7,500 out-of-pocket maximum. Once the insured reaches the out-of-pocket maximum, in-network covered services for the rest of the plan year are paid at:
- An Exclusive Provider Organization (EPO) plan is best described as a plan that:
- Which type of managed care plan combines features of an HMO (PCP gatekeeper) with limited out-of-network coverage at a higher cost share?
- Which of the following best defines coinsurance?
Last reviewed: · editorial process
PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)