In: Economics
What difficulties in the provision of health insurance have led the private sector in search of alternatives to the traditional indemnity policy model? Explain the basic rationale for what has come to be known as “consumer-driven health care.” How are these new insurance arrangements structured and how prevalent are they? Review the pros and cons of this type of insurance.
Solution-
An indemnity plan is a traditional health insurance plan which allows you to visit any doctor or specialist you want for healthcare and the insurance company then pays a set portion of your total charges.this plan is also called the fee-for-service plan and it allows the individual to direct their own healthcare by paying an annual deductable to the insurance company so that they will pey for his/her insurance claims.
The traditional indemnity health insurance plan differs from the managed care in the following ways:
The indemnity plans allows participants to see any physician or
healthcare provider they want but managed care limits the choice of
physicians and healthcare facilities for the participant
In indemnity plan the utilization of service is not restricted but
the managed care facility tightly controls the utilization of
service by the individual.
Indemnity insurance plans gives participants the freedom to see any
apecialists without a refferal fom the primary doctor but in a
managed care facility the primary doctor determines if and when you
need to see a specialist
The amount of annual deductable payment is relatively more in the
traditional indemnity plan than the managed care plan.
The following are some of the most significant impacts of managed care for patients:
It provides the patients with more cost-effective medical care
facilities with lower out-of-pocket cost
It provides the best quality healthcare to patients with lower
cost
It has its well defined set of guidelines regarding various issues
of healthcare which prevents unnecessary surgeries and medical
tests for the patient
It provides the patients with a restricted care as the patient has
to get madical care only from the managed care provider's
network.