What does the term 'managed care' refer to in health insurance?

The term 'managed care' in health insurance refers to a comprehensive plan that provides health care services at reduced costs. This model is designed to manage the quality and cost of health care by coordinating services among various providers and limiting unnecessary services. Managed care plans typically involve a network of doctors and hospitals that agree to provide services for predetermined fees. This arrangement allows insurance companies to offer their members lower out-of-pocket costs, such as co-pays and deductibles, while also fostering preventive care and efficient management of medical resources.

This model incentivizes providers to care for patients proactively, focusing on prevention and efficient care delivery, which can ultimately lead to overall savings in health care expenditure. Thus, the nature of managed care is to deliver comprehensive health services while actively managing costs, which aligns with the correct choice.