What is a pre-paid health plan primarily defined by?

A pre-paid health plan is primarily defined by a predetermined set of benefits covered under one set annual fee. This structure essentially means that enrollees pay a specific amount—often referred to as a premium—on an annual basis, and in return, they receive a range of health services specified by the plan. The fee covers various medical services, which can include preventive care, physician visits, hospital services, and possibly more, depending on the specifics of the plan.

This model contrasts with other payment structures in health insurance. For instance, it does not emphasize unlimited coverage or the selection of any provider, as those are characteristic of other insurance types. Instead, it emphasizes a clear understanding of what services are available under the agreement, which promotes predictability in healthcare costs for both the patient and the provider. By paying upfront, members essentially pre-fund their healthcare, which can lead to better management of healthcare resources and overall cost control.