Health Care
HSA 500 Paper #2
Jennifer M. Smith
Dr. Robert Lindsey
Health Service Organization
February 17, 2013
1. Compare the three (3) main types of health insurance in the U.S. and assess the solvency of each. Make a prediction regarding the longevity of each type over the next 30 years. Indemnity or fee-for-service plans, Health maintenance organizations (HMOhmo), and Preferred provider organizations (ppoPPO) are three types of health insurance in the U.S. According to (Williams and Torrens, 2010), The indemnity plan, reimbursed by fee for service, is the oldest form of health insurance design. Under indemnity insurance, the insurers guarantee payment to any licensed health care provider for all covered services. In recent years, fee-for-service indemnity plans also have grown more similar to man- aged care plans. Traditionally, fee-for-service indemnity plans gave individuals an unrestricted choice of licensed health care professionals. Care providers were free to determine which services were appropriate based on their professional judgment and were reimbursed for all the care they delivered. Today, nearly all fee-for-service plans have adopted some form of the utilization- management strategies formerly associated with managed care, such as preauthorization for hospitalization or referral to specialists. In my opinion the indemnity design will not be around in the next thirty years it is losing favor with employers. HMOs are the most tightly closed of all managed care systems. HMOs typically provide no coverage for out-of-plan services and require health care providers to share the financial risk for the amount of services provided. Data have shown that, at an aggregate level, premiums are lower in communities with a higher penetration of HMO plans and more intense competition among health plans (Stein, 1997). Restricted provider networks and a strong reliance on primary care physicians have been major forces allowing
Jennifer M. Smith
Dr. Robert Lindsey
Health Service Organization
February 17, 2013
1. Compare the three (3) main types of health insurance in the U.S. and assess the solvency of each. Make a prediction regarding the longevity of each type over the next 30 years. Indemnity or fee-for-service plans, Health maintenance organizations (HMOhmo), and Preferred provider organizations (ppoPPO) are three types of health insurance in the U.S. According to (Williams and Torrens, 2010), The indemnity plan, reimbursed by fee for service, is the oldest form of health insurance design. Under indemnity insurance, the insurers guarantee payment to any licensed health care provider for all covered services. In recent years, fee-for-service indemnity plans also have grown more similar to man- aged care plans. Traditionally, fee-for-service indemnity plans gave individuals an unrestricted choice of licensed health care professionals. Care providers were free to determine which services were appropriate based on their professional judgment and were reimbursed for all the care they delivered. Today, nearly all fee-for-service plans have adopted some form of the utilization- management strategies formerly associated with managed care, such as preauthorization for hospitalization or referral to specialists. In my opinion the indemnity design will not be around in the next thirty years it is losing favor with employers. HMOs are the most tightly closed of all managed care systems. HMOs typically provide no coverage for out-of-plan services and require health care providers to share the financial risk for the amount of services provided. Data have shown that, at an aggregate level, premiums are lower in communities with a higher penetration of HMO plans and more intense competition among health plans (Stein, 1997). Restricted provider networks and a strong reliance on primary care physicians have been major forces allowing
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