Which insurance model is noted for using a limited network of providers and often has lower premiums?

The Health Maintenance Organization (HMO) model is recognized for utilizing a limited network of providers, which helps to keep costs down, resulting in lower premiums for members. HMOs focus on preventive care and typically require members to select a primary care physician (PCP) who coordinates referrals to specialists within the network. This structured approach not only helps manage healthcare spending but also encourages a cohesive management of a patient's health.

In contrast to HMOs, other insurance models, such as Preferred Provider Organizations (PPOs), allow more flexibility in provider choice but often come with higher premiums. Point of Service (POS) plans combine features of both HMOs and PPOs but typically have higher costs associated with out-of-network care. Health Savings Accounts (HSAs) are savings accounts linked to high-deductible health plans that do not inherently dictate provider networks but can be beneficial for managing out-of-pocket costs.

Though each model has distinct characteristics, the HMO's strategy of utilizing a controlled network of providers is key to offering lower premiums compared to the broader access found in other types of plans.