Question

Compare and contrast a traditional indemnity health insurance policy versus a managed care plan, as well as the pros and cons of each.

Answer 1

Traditional Indemnity Health Insurance Policy V/s Managed Care Plan

Indemnity plans allow you to direct your own health care and visit almost any doctor or hospital you like. The insurance company then pays a set portion of your total charges. Indemnity plans are also referred to as "fee-for-service" plans.

They are based on the principle of Make good the loss.

It gives greater freedom and flexibility

On the other hand, Managed care plans are type of health insurance in which contracts are made with health care providers and medical facilities to provide care for members at reduced costs. Here payments are fixed and low as compare to indemnity plan.

PROS AND CONS OF MANAGED HEALTH CARE HEALTH INSURANCE:

Merits:

1. Lower cost without sacrificing quality
2. Readily available network of health service providers
3. Information moves rapidly within a network.
4. It keeps families together.
5. There is a certain guarantee of care within the network.

Demerits

1. It limits care access for those who do not have insurance or provider coverage.
2. The rules of managed care are extremely rigid.
3. People are forced to advocate for themselves
4. Loss of privacy
5. Busy networks can have longer waiting time

PROS AND CONS OF INDEMNITY HEALTH CARE HEALTH INSURANCE:

Merits:

1. Unlimited choice of doctors, hospitals and other health care providers, and non-experimental treatments
2. No waiting or fighting for a referral to an in-network specialist or for approval of a treatment.
3. Best emergency medical coverage
4. Full privacy
5. Flexible rules

Demerits:

1. Most expensive health insurance
2. Lots of paperwork and documentation
3. Little or no preventive benefits
4. Often covers certain percentage of bill not fully covered