Which type of health plan involves a network of providers that offer services at reduced costs?

The correct choice is the health maintenance organization (HMO). An HMO is a type of managed care health plan that requires members to obtain their healthcare services from a network of designated providers. These providers have agreed to offer services at reduced costs, which helps control overall healthcare expenses for both the insurer and the insured. Typically, members must select a primary care physician (PCP) who coordinates their care and provides referrals to specialists within the network.

This structure promotes preventive care and efficient management of healthcare services, ultimately contributing to lower premiums and out-of-pocket costs for members. The emphasis on a specific network of providers is a defining characteristic of HMOs, and it's what enables them to negotiate lower rates.

In contrast, while exclusive provider organizations (EPOs) also require the use of a specific network of providers, they typically do not require a primary care physician or referrals for specialist visits. Point-of-service plans blend features of HMOs and PPOs and allow members more flexibility but often at a higher cost. Preferred provider organizations (PPOs) provide the greatest flexibility regarding provider choice but also generally involve higher costs and do not strictly require members to use network providers for care, unlike HMOs.