What type of health plan might limit coverage based on geographical location?

The Health Maintenance Organization (HMO) is a type of health plan that often limits coverage based on geographical location. This is primarily because HMOs typically require members to receive care from a network of providers within a specific area. To manage costs and maintain a higher level of coordinated care, HMOs have agreements with specific doctors, hospitals, and healthcare facilities in a designated region. As a result, when a member seeks care outside of this network or geographical area, they may have limited options or may not be covered at all, emphasizing the importance of choosing a primary care physician who can direct their healthcare within that network.

In contrast, the Preferred Provider Organization (PPO) provides more flexibility in choosing healthcare providers and allows members to seek care outside of their network, though this may come with higher out-of-pocket costs. Indemnity plans usually offer coverage for any healthcare provider regardless of their location, and long-term care insurance is typically focused on covering services related to long-term care rather than geographic limitations. Therefore, the HMO's structure and emphasis on a defined network make it the correct choice when considering plans that limit coverage based on location.