Health Maintenance Organization Act of 1973
- Health Maintenance Organization Act of 1973
The Health Maintenance Organization Act of 1973 (Public Law 93-222), also known as the HMO Act of 1973, 42 U.S.C. § 300e, is a law passed by the Congress of the United States that resulted from discussions Paul Ellwood had with what is today the Department of Health and Human Services. It provided grants and loans to provide, start, or expand a Health Maintenance Organization (HMO); removed certain state restrictions for federally qualified HMOs; and required employers with 25 or more employees to offer federally certified HMO options alongside traditional indemnity insurance upon request (the "dual choice provision"). HMOs were required to meet three basic requirements. These were to offer a specified list of benefits to all members, charge all members the same monthly premium, and be structured as a nonprofit organization.
The Act solidified the term "HMO" and gave HMOs greater access to the employer-based market, providing for the rapid expansion of HMOs in later years. No longer needed now that HMOs are widespread, the dual choice provision expired in 1995.
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