Question

What is the definition of “indemnity” insurance? Why do you suppose it has largely been replaced by managed care? What are the three main types of managed care organizations? What are the pros and cons of each type?

Answer 1

Health is the need of everyone and the healthcare service is affordable by the insurance policy .Indemnity insurance in simple refers to two parties in an insurance scheme when there is a loss for one party , other party is supposed or responsible to pay the loss of them.

This was not a welcomed one among population and it was greatly replaced by the managed care.

This managed care is categorized into three namely

• Health mainmaintainance organization
• Preffered provider organization
• Point of Service

The pros and cons are

HMO

• Pros: low cost and affordable ,the plans can be chosen as per patient affordability and preferences ,east to understand ,agent is there to clarify doubts
• Cons: no out of network services or providers ,no reference provided out of network coverage ,area specific ,out of pocket expenses can occur if patient decides to get treatment from other doctor

PPO

• Pros: can choose provider, also can see a specialist without reference
• Cons: the cost is high compared to HMO,deductible are high compared to HMO

POS

• Pros: can use out of network services ,no referrals are needed, not limited to area as it is applicable everywhere
• Cons:high cost, internet issues in connectivity