ABSTRACT

This chapter approaches health insurance from a slightly different perspective than Chapter 13, which focused on the general function of health insurance. This chapter describes two different models used to design health insurance policies. The first model is the conventional or indemnity model of insurance, which is the original model of insurance. The second model is based on the idea of managed care, and originated with the establishment of the health maintenance organization (HMO) model, which was described in Chapter 9. This chapter presents a description of these two models, and then describes the increasing trend toward managed care in all health insurance plans.