A form of coverage that protects the insured against the risk of medical treatment. The insurance company provides the payment of part or of the entire cost of medical services. In the past decades, insurance companies have become more specialized and offer a variety of coverage options for specific needs of the insured. The typical form of health insurance is the indemnity insurance that gives the insured the possibility to choose the provider and the type of medical service without any constraint, and the insurance company offers a reimbursement for that service. Typically, below a fixed annual minimum amount, the insured bears the entire cost of the medical treatment or a copayment of the charge for the service between the two parties can be agreed. However, the lack of constraints on the choice of either the services or the providers rendered this type of insurance too expensive. In response to the need of containing costs for providing health benefits, alternative forms of insurance have been developed, known as "managed care". The term "managed care" encompasses all those techniques used by organizations as health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point of service organizations (POSs).


FABOZZI F., MODIGLIANI F. and JONES F. (2010), Foundation of Financial Markets and Institutions, Pearson International Edition.

Editor: Bianca GIANNINI

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