Health and Life Insurance

Answer: B - Providing undefined health care to cover any situation is not something an HMO must do to receive government grants. Health services must be in a predefined package that includes routine preventative care in order for HMO’s to be eligible for government grants. HMOs must also maintain certain minimum financial requirements to pay health claims either through the net worth of the HMO or reserve funds. A “use charge” or copayment must be nominal for services rendered and premiums should be established through a community rating basis without consideration of actual use by individuals.