State RegulationsOH specificDifficulty 2/5
A Youngstown employer asks its benefits advisor how an HIC's prepaid model differs from a traditional indemnity arrangement. Which answer is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under the prepaid basis described in Ohio Revised Code Chapter 1751, the HIC collects a fixed periodic premium in advance and, rather than reimbursing charges after care is received, provides or arranges covered services through its organized provider system. A traditional indemnity arrangement operates in reverse: it finances care after the fact without organizing the delivery system. The Ohio Department of Insurance supervises HICs on this combined delivery-and-financing basis.
Why the other options are wrong
- A) This reverses the two models: indemnity plans reimburse after care, while HICs arrange care through networks.
- B) Billing members per service after the fact is fee-for-service thinking, not prepaid financing.
- C) Nothing in the prepaid model confines coverage to catastrophic stays; basic health services include routine categories of care.
Memory hook
HIC prepaid = pay ahead, care arranged; indemnity = care first, reimbursement after.