Health care is changing quickly. Thirty years ago, nearly all Americans had fee-for-charge coverage. A person with this type of insurance could go to any doctor, hospital, or other health provider. The health insurance company would then pay the provider or reimburse the patient. Typically, the patient paid a portion of the costs through coinsurance.
Today there is a full range of health insurance choices. Traditional indemnity plans are at one end of the spectrum and Health Maintenance Organizations (HMOs) are at the other. The plans in between, point-of-service (POS) plans and preferred provider organizations (PPOs), are hybrids of indemnity plans and HMOs.
Today, though, more than half of all Americans who have health insurance are enrolled in some kind of managed care plan, a more structured way of both providing health services and paying for them. The initial impetus for managed care was a desire to contain costs. Increases in health-care costs had far outpaced increases in inflation throughout the ’80s and into the ’90s.