Group Health Insurance Categories

D

Group health insurance is a type of health insurance plan that is offered to a group of individuals through an organization, such as an employer or a union. These organizations enter into contracts with health care providers to provide coverage to their employees or members.

Most group health insurance plans fall into one of two categories: traditional indemnity plans and managed care plans.

Traditional indemnity plans are also known as fee-for-service plans. These plans allow policyholders to choose their healthcare providers and receive care without restrictions. The insurance company pays a percentage of the cost of the covered services, and the policyholder pays the remaining cost, typically through deductibles and co-payments. These plans generally offer more flexibility and choice but may also come with higher out-of-pocket costs.

Managed care plans, on the other hand, are designed to manage the cost and quality of healthcare. These plans work by contracting with healthcare providers and facilities to provide care to policyholders at a lower cost. There are three types of managed care plans: Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point of Service (POS) plans. These plans typically require policyholders to choose a primary care physician who coordinates their care and may require pre-authorization for certain procedures.

Therefore, the correct answer is B. Traditional indemnity and managed care plans. Answer A is incorrect because PPOs are a type of managed care plan. Answer C is incorrect because fee-for-service and traditional indemnity plans are essentially the same thing. Answer D is incorrect because it includes both correct and incorrect answers.