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Hassle-Free Health Coverage: Indemnity vs. Managed Care

There is a high level of concern over the practices of managed care providers.

Managed care is known for its atrocities: gatekeepers refusing to give referrals; HMO requirements to notify or get permission from a primary care physician; financial incentives for physicians who restrict care for cost containment purposes; "gag" clauses prohibiting doctors from discussing expensive treatments; drive-through deliveries; drive-through mastectomies; capitated payment systems,

A report sponsored by the Patient Access to Specialty Care Coalition -- a group comprised of organizations representing consumers and providers of medical services -- went so far as to say that most patients trust the federal government and auto mechanics more than managed care companies.

The number of large employers offering a POS plan also grew in 1993. Some 15 percent of large employers offered a POS plan in 1993, up from 10 percent in 1992. And, enrollment in POS plans grew to 9 percent of employees in 1993, up from 6 percent the previous year. However, POS plans are rare among smaller employers, offered by only 4 percent the report said.

While there was some increase in the number of employers offering HMOs to employees in 1993, enrollment remained unchanged. Among larger employers, 46 percent offered an HMO in 1993, compared to 43 percent in 1992. HMO enrollment also remained stable between 1992 and 1993 at 19 percent of employees.

Beginning in the 1990s, various political groups in Washington, D.C. started lobbying for various versions of a so-called Patients' Bill of Rights to be passed into law. While the different plans included specific details of their own, they tended to share some basic points.

The proposals tended to eliminate many of the cost-control mechanisms that managed care plans use to keep their coverage less expensive than traditional indemnity insurance. Among the common targets: gatekeeper referral systems, appeals boards made up of administrators (rather than doctors) and restrictive lists of approved proivders.

(For more details on this issue, see Chapter 13.)

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