How did the HMO Act of 1973 affect employers?

The HMO Act of 1973 significantly influenced employer-sponsored health care by mandating that employers offer Health Maintenance Organizations (HMOs) as a health insurance option to their employees, provided certain conditions were met. This legislation was aimed at improving access to healthcare while controlling costs by promoting managed care systems like HMOs, which emphasize preventative care and provide a structured approach to healthcare services.

This requirement transformed the health insurance landscape, as it encouraged employers to include HMO options in their benefits packages, thereby offering employees a choice in their healthcare coverage. This change fostered a competitive environment for health plans, incentivizing both better services and pricing, ultimately benefiting consumers.

The other choices do not accurately reflect the intent or effect of the HMO Act. For instance, the act did not allow employers to selectively choose which employees received health insurance, nor did it impose requirements for employers to cover all medical expenses or eliminate the need for health benefits altogether. Instead, it aimed to establish a framework that broadened access to HMOs as a viable option for employee health care coverage.