Managed care combines the financing and the delivery of care to control cost while keeping quality. Its usual tools: - A network of providers paid negotiated fees. - Preauthorization for nonemergency hospital admissions. - Utilization review: checking whether care is medically necessary. Paying any bill from any provider without review is the opposite approach, which managed care was developed to replace.

Gatekeeper concept: a primary care physician (PCP) gives first-line care, keeps continuity of care and starts referrals to specialists. In California, policies covering hospital, medical or surgical expenses must let obstetrician-gynecologists serve as PCPs if they meet the insurer's written eligibility criteria for specialists seeking PCP status (Ins. Code §10123.83).

Master policy owner: group disability insurance is written under a master policy issued to a party such as the employer, so the employer is the policyholder. The insurer issues individual certificates to the policyholder for delivery to the insured people, stating their protection and to whom it is payable (Ins. Code §§10270.5(a), 10270.6(b)). Employees are insured under the group contract; they do not each own a policy.

Extension of benefits: continues a benefit after a group policy is discontinued, for a person who is totally disabled on that date. For expense-incurred medical benefits, California treats an extension as reasonable if it pays covered expenses directly related to the disabling condition for at least 12 months. It may end sooner if the person is no longer totally disabled or a succeeding carrier covers the person without limit on that condition (Ins. Code §§10128.1, 10128.2).

Preexisting conditions: a preexisting condition provision excludes coverage, for a period after the effective date, of a condition treated or advised on during a period before it. California bars both preexisting condition and waivered condition provisions in group health benefit plans and in nongrandfathered individual plans (Ins. Code §§10198.6(b), 10198.7). Older time limits on these exclusions survive only for grandfathered individual plans.