A managed health care plan strives to provide health care to members at a reduced cost, according to MedlinePlus. The insurance company contracts health care providers and medical facilities.
The network rules formulated by the health care providers determine the amount a subscriber pays for the care, notes MedlinePlus. Restrictive plans cost less compared to flexible plans. Typically, there are three types of managed health care plans, including health maintenance organizations, preferred provider organizations and point of service plans. Health maintenance organizations pay for care within the network, and a patient has to choose a primary doctor to coordinate most of the care. Preferred provider organizations pay more for care within the network, and partially outside the network. A point-of-service plan gives members the option of choosing between a preferred provider organization or a health maintenance organization.