Chapter 7 went into great detail about the different types of Managed Care Plans. People want to carry health insurance to help cover them in case of a health emergency. Firms sell insurance because they are paid a set amount to assume a risk that can be managed by spreading it over a large pool of insurers. Insurance companies set premiums based on the expected payout along with other costs. Typically, health care is provided by a managed care organization (MCO) to a defined population at a fixed monthly rate. Managed care has three different plans that are set up between third party payers and healthcare providers. The types of managed care plans include health maintenance organizations (HMO), preferred provider organizations (PPOs),