HMOs did exist before the HMO Act. Kaiser had existed for decades (initially for employees of Kaiser Aluminium, later opened up to anyone). The HMO Act strongly encouraged HMOs by requiring that if an employer offered more than one health insurance plan to its employees, then one of those plans must be an HMO. This made then available to most everyone getting their insurance through an employer. Their usually lower premiums made them an attractive choice to the employees.

The reasons for why health insurance has risen in costs so dramatically since the 1970s is still a matter of debate. However, the probably causes are that beginning following WWII and especially in starting the 1960s health care has been able to do vastly more than it could in earlier decades. Medical technology has advanced dramatically. Some of those technologies have reduced costs, some (probably more) have increased costs. Also, with improved health care, nutrition, and other factors, people are surviving to much older ages. The debilitating chronic diseases associated with age are relatively expensive to treat, as they require care that may last a lifetime.