Which of these statements regarding HIC's is INCORRECT?

• A. HIC's provide emergency care outside the service area
• B. HIC's requires subscribers to choose a primary care physician
• C. HIC's operate on a prepayment basis
• D. HIC's operate on a reimbursement basis

Answer: (D)

HICs are typically prepaid health plans where access to care is arranged through a network and providers are paid by the plan in advance, with members paying fixed costs like premiums and copays. That prepaid structure means services are not paid for after the fact by submitting claims to be reimbursed.

So the statement that HICs operate on a reimbursement basis isn’t accurate. Reimbursement models expect the member to pay the provider upfront and then file a claim for reimbursement from the insurer, which is different from how prepaid plans function. The other statements align more with how many prepaid plans operate: they may require choosing a primary care physician in many managed care setups, and emergency care is typically covered even if it occurs outside the usual service area, as emergencies are generally treated promptly within the plan’s coverage rules.

In short, the incorrect statement reflects a reimbursement model, which does not describe how HICs are designed to operate.