Illinois Health Insurance Practice Exam

HMO's have the _____ premium rates.

1. Highest

2. Lowest

3. Average

4. Fluctuating

The correct answer is: Lowest

HMO plans typically have the lowest premium rates among the various types of health insurance plans. This is largely because they function on a managed care model, where an emphasis is placed on preventive care and efficiency. Members must choose a primary care physician and receive care from within a network of providers, which helps to reduce costs for the insurance company. This structure allows HMOs to offer lower premiums compared to other plans like PPOs, where members have more flexibility but also higher costs associated with that flexibility.