Merritt Personal Lines Manual: Preventative Care

As we've noted, one major difference between an indemnity plan and a managed care plan is that under the first, there are typically no wellness educational programs.

Usually, when the insured has indemnity coverage, the insured seeks care only when it is needed for a particular condition. And bills are paid only after the care is delivered.

Managed care plans stress prevention and offer programs to help people learn about their conditions.

This applies to facilities as well as physicians. The indemnity plan lets the insured choose to go to any hospital the insured wishes -- but it doesn't let the insured choose any service from that hospital. If the insured submits bills from a hospital's wellness program, they will likely be denied.

During the 1970s and early 1980s, some indemnity insurance companies did pay for certain wellness programs affiliated with hospitals. They stopped doing this in the late 1980s and early 1990s. However, the pendulum seems to be swinging back.