State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
In California, which regulatory body oversees HMOs and POS plans, while traditional PPO and EPO health insurance is overseen by the CDI?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
California divides health plan regulation: the Department of Managed Health Care (DMHC) regulates HMOs and POS plans (knox-keene licensed plans), while the California Department of Insurance (CDI) regulates traditional health insurance such as PPOs and EPOs (CIC Section 740). Knowing which agency governs which product is a California-specific exam point.
Why the other options are wrong
- B) The CDI regulates PPOs and EPOs; HMOs and POS plans fall under the DMHC — this option reverses the two agencies' roles.
- C) CMS administers Medicare and Medicaid at the federal level; it does not license or regulate state HMO products.
- D) HHS is a federal department and is not the state regulator that licenses HMOs.
Memory hook
HMO = Health Maintenance = DMHC (the H matches both). PPO = plain insurance = CDI.