Page 324 - Ebook health insurance IC27

The Insurance Times

Tailored Plans
Expand or limit coverage to suit individual clients' needs and budgets. These plans are
usually available to group clients.

Cafeteria Plans
Individuals and employees are able to substantially design their own plans based on a
list of benefits offered by the insurer.

Managed care plans
Managed care plans have been designed to overcome the out-of-control costs of the
indemnity plans. These plans are based on an organized way to manage costs, use, and
quality of the health care system. The plans involve medical providers in the provision
of the services by means of risk sharing arrangements such as fixed (capitation) and
reduced charges (Preferred Provider Organizations) contracts, out-of-network (Point-
of-Service) and Health Maintenance Organizations (HMOs). The following are different
types of arrangements offered under managed care plans:

Capitation
A method of paying medical providers through a pre-paid, flat monthly fee for each
covered person.

Under these arrangements, the provider shares the risk in the sense that the capitation
fee is independent of the number of services received or the costs incurred by the
provider in furnishing those services.

328 Guide for Health Insurance