Which health care model uses a prepaid fee and emphasizes health maintenance and disease prevention with limited provider choice?

• A. Health Maintenance Organization (HMO)
• B. Preferred Provider Organization (PPO)
• C. Medicare
• D. Fee-for-service

Answer: (A)

This arrangement is defined by a prepaid, network-based approach that emphasizes keeping people healthy through prevention. Members pay a fixed monthly premium, and most services are covered within a defined group of providers. Care is coordinated by a primary care physician who acts as the gatekeeper, requiring referrals for specialists. Because the network is limited, patients generally don’t have the freedom to see any provider outside the plan without extra costs.

PPOs, by contrast, allow broader choice and often payment is not prepaid in a capitation sense, with costs varying by services and some out-of-network coverage. Medicare is a government program with its own funding structure, not a prepaid capitation model tied to a single network. Fee-for-service pays for each service rendered rather than through a prepaid plan with a gatekeeper.