Is it true or false that an HMO is an alternative to traditional health insurance indemnity plans?

The statement is true because Health Maintenance Organizations (HMOs) are indeed an alternative to traditional health insurance indemnity plans. HMOs operate on a managed care model, which typically requires members to choose a primary care physician and obtain referrals for specialist care. This structure is designed to provide comprehensive health services while controlling costs through preventive care and coordinated treatment.

In contrast, traditional indemnity plans offer more flexibility in provider choice and do not usually require referrals, but they often come with higher out-of-pocket costs and less emphasis on preventive care. Therefore, HMOs represent a different approach to health insurance, focusing on cost-effectiveness and efficient care delivery, distinguishing them from the more traditional indemnity models.