Question

Compared to indemnity plans, what is an advantage of managed health care plans?

A) You will have lower insurance premiums.
B) There are no out-of-pocket expenses required.
C) You have greater choices of health care providers.
D) They are very efficient in their handling of paperwork.

Answer 1

An advantage of managed health care plans compared to indemnity plans is lower insurance premiums, which result from the plans' ability to negotiate lower service rates.

Step-by-step explanation:

Compared to indemnity plans, an advantage of managed health care plans such as Health Maintenance Organizations (HMOs) is that they often come with lower insurance premiums. This is because they have a more confined network of healthcare providers and a structured approach to care. With their ability to negotiate lower rates for services due to their large number of clients, managed care plans can save money on payouts and pass some of these savings to their clients in the form of lower premiums. However, consumers have less flexibility in choosing providers and may have to deal with more paperwork compared to indemnity plans.