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Prepaid health care plans

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

Note: Please cite the sources

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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 ...

Solution Summary

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

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