Managed Care Plans: MMO and PPO Health Insurance

The 1980s saw rapid increases in health insurance premiums, driven by new medical technology and cost-based reimbursement systems used by insurers and the Medicare program. In 1983 Congress changed the system Medicare used to pay hospitals. Rather than paying based on allowable costs, it introduced the prospective payment system, in which hospitals were paid a fixed price based on the diagnosis of admitted patients. (more…)