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January 4, 1995

Health Insurance: Definitions and Distinctions

Author Affiliations

Atlanta, Ga

JAMA. 1995;273(1):24. doi:10.1001/jama.1995.03520250038022

To the Editor.  —The article by Dr Safran and colleagues1 proposed to compare fee-for-service with prepaid health care systems. The comparison is misleading because the former is an employer-provided, fee-for-service medical care system with utilization review. This is really nothing more than another form of managed care, and definitely not true fee-for-service.A true fee-for-service system would not incorporate any utilization review because the user would be able to purchase medical care from any physician or hospital. The patient would not be limited by his or her insurance carrier. A more accurate comparison would have used a fee-for-service example whereby the patient has a high-deductible, patient-paid medical insurance plan without the current tax penalty under which patient-paid medical care must function.Any medical care or insurance that a patient buys is purchased with after-tax dollars, while employer-paid medical care benefits are purchased with the employees' pretax dollars. This occurs

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