What is a prepaid plan

what is a prepaid plan A Health Plan is an entity that provides, offers or arranges for coverage of designated health services needed by plan members for a fixed, prepaid premium. There are four basic models of Health Plans:
  • Group Model Health Plan. This type of Health Plan contracts with doctors organized as a partnership, professional corporation or other association. The health plan compensates the medical group for contracted services at a negotiated rate, and that group is responsible for compensating its physicians and contracting hospitals for care for their patients.
  • IPA Health Plan. The Health Plan contracts with an association of medical professionals to provide medical services in return for a negotiated fee. The IPA in turn contracts with physicians who continue in their existing individual or group practices.
  • Network Model Health Plan. A health care model in which the Health Plan contracts with more than one physician group and may contract with single and multi-specialty groups. The physician may share in utilization savings, but may not necessarily provide care exclusively for Health Plan members.
  • Staff Model Health Plan. This health care model employs physicians to provide health care to its members. All premiums and other revenues accrue to the Health Plan, which compensates physicians by salary and incentive programs.

Under the Federal Health Plan Act, an entity must have three characteristics to call itself an Health Plan:

  • an organized system for providing health care or otherwise assuring health care delivery to a geographic area,
  • an agreed upon set of basic and supplemental health maintenance and treatment services,
  • a voluntarily enrolled group of people.


  • Quality Care.
  • Preventive Measures.
  • Affordability.

This is the Health Plan philosophy. When you become a member of an Health Plan, you join an exclusive health delivery system that provides high quality care with more comprehensive benefits, more preventive services and fewer out-of-pocket expenses -- all at an affordable price.

The first step toward enjoying these benefits is the selection of a personal physician - a health care manager - who coordinates your care with large team of health care professionals. An advantage of Health Plan membership is that members have the choice of a variety of personal physicians who have met the exceptionally high standards of professional training and competence.

Health Plans encourage their members to visit their personal physician as frequently as they deem necessary. A working relationship with your physician is important - to you and your doctor. The more steadily he/she visits with you, the more likely it is that small problems will be detected and treated early, avoiding the major problems down the road. These steady visits comprise what we call preventive care. They include diagnostic tests, such as mammograms, pap smears, diabetes detection, and hypertension testing. Health Plans believe in preventive care.

Your membership card is a promise to secure comprehensive, coordinated care while maintaining costs.

Health Plans are solving the kinds of problems that government has attempted to address in its many reform packages. Members have reported in survey after survey, that they like the care they receive. The surveys indicate that members believe that the care they receive is as good - or better - than old fashioned, traditional medical care. These members are among the nearly 3 million Floridians covered by Health Plans today.

HOW DO YOU KNOW IF YOUR HEALTH PLAN IS GOOD? Quality can and should be measured in different ways. Quality can signify a clinical aspect - such as the rate of immunization or the use of prenatal care. On the other hand, it can also address administrative issues such as how a member is treated on the phone and in person by Health Plan staff.

Health Plans carry out a number of different quality assurance exercises. Plans document their performance in a range of quality areas. There is an assumption that since many Health Plan providers are prepaid for services, the interest in treating patients would be low. To prevent such abuse, Health Plans monitor its doctors to be sure that preventive care and referral services are being used according to the best medical practice and regulatory standards.

Health Plans are required to sustain an additional level of quality assurance by federal regulation and state law. These extra measures are not provided to those in traditional insurance, because those insurers are not required by law to monitor the quality of care provided by your doctor. Without a close relationship with doctors, a traditional insurance plan cannot monitor the quality of care the way Health Plans can.

In our state, the Florida Department of Insurance, in conjunction with the Agency for Health Care Administration, not only screen Health Plans for quality of care, but for the financial stability overall. Only state licensed Health Plans have this type of approval stamp. Additionally, the Department of Insurance has the power to cap the amount of money any Health Plan may charge as premium to their members. Health Plans are not like any other type of business. Contrary to the beliefs of many, Health Plans may not impose a rate increase on their members without prior approval from the state government.

Health Plan members have an advantage over those enrolled in traditional insurance plans.

  • 80% of all doctors in Health Plans are currently board certified.
  • In traditional "fee for service" plans, this number is much lower - 60%.

Board certified doctors have been screened and passed a high level of expectation by their peers and the medical community.

In addition, Health Plans employ full time utilization review departments and full time medical directors that the Health Plan employs to assure that you are receiving the most appropriate level of care. Major medical decisions are reviewed by the Health Plan's medical director or utilization review nurse, who is trained in recognizing acceptable standards of medical practice.

Source: www.fahp.net

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