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Prepaid health care plans

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Describe what prepaid health care plans are and some of the related accounting issues.

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Describe what prepaid health care plans are and some of the related accounting issues.

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Prepaid Healthcare -- An arrangement between a provider of healthcare services and a sponsoring organization specifying the payment of a fixed sum or a fixed amount per enrollee in advance of the services delivered by the provider. The arrangement may cover a wide range of healthcare services or a specialized aspect of health care (for example, dental and eye care).

source: http://www.hfma.org/library/accounting/reporting/ppb11_risk_contracts.htm

Health maintenance organizations are prepaid health plans. As an HMO member, you pay a monthly premium. In exchange, the HMO provides comprehensive care for you and your family, including doctors' visits, hospital stays, emergency care, surgery, lab tests, x-rays, and therapy.

The HMO arranges for this care either directly in its own group practice and/or through doctors and other health care professionals under contract. Usually, your choices of doctors and hospitals are ...

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