Short answer: An HMO is a managed-care plan that keeps costs low by requiring you to use in-network providers and choose a primary care physician who coordinates your care and refers you to specialists.
A Health Maintenance Organization (HMO) is built around a defined network and a primary care physician (PCP) who serves as your care coordinator. You generally need a referral from your PCP before the plan covers specialist care, and routine out-of-network services aren’t covered except in emergencies. In exchange for those restrictions, HMOs usually offer the lowest premiums and predictable copays, which makes them a popular budget-friendly option.