Here is the Wikipedia definition. HMO's have lower premiums and in turn, restrictions on services.
A
health maintenance organization (
HMO) is a type of
managed care organization (MCO) that provides a form of
health care coverage in the
United States that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract. The
Health Maintenance Organization Act of 1973 required employers with 25 or more employees to offer federally certified HMO options.
[1] Unlike traditional
indemnity insurance, an HMO covers only care rendered by those doctors and other professionals who have agreed to treat patients in accordance with the HMO's guidelines and restrictions in exchange for a steady stream of customers.