What Is Indemnity Health Insurance?

By Robert Fredricks Posted in Health Insurance News

An indemnity plan is sometimes called a fee-for-service insurance plan. It means a consumer can use whichever medical provider they choose such as doctors and hospitals. Being under an indemnity insurance plan means you, your doctor or hospital will send the bill to the insurance company who will pay part of the bill. Typically, you will have a set deductible, which is the amount of the covered expenses consumers must pay before the insurance company starts to reimburse you for the out-of-pocket expenses you pay.

Once you meet the amount of deductible that is set, most indemnity plans only pay a certain percentage of what they consider what is normal costs for covered services. The insurance company generally pays up to 80 percent of the “normal” costs and the consumer will pay the remaining 20 percent which is known as co-insurance. If the insurance provider charges more than the usual rates, the consumer must pay both the co-insurance and the extra charges.

Understanding Indemnity Insurance

As a consumer, if you are covered under an indemnity health insurance, you can be seen by any doctor you want. With an indemnity health insurance plan, you have more control over your health care but you may have to pay higher premiums. Indemnity health insurance requires consumers to meet deductibles before the insurance company will pay. It is important to understand that when you choose the amount of your deductible, the lower the deductibles, the higher the premiums.

Indemnity health insurance plans are also referred to as the traditional health insurance plans, in that, they are probably the oldest form of medical insurance policies.

There are different categories of indemnity health insurance plans. One of the most common indemnity health insurance plans  is called a “catastrophic” hospital plan or a major medical insurance policy. These health insurance plans are intended to protect the consumer financially in the event of major illnesses or injuries and may not offer benefits for preventive health care, routine/well office visits or out-patient lab and/or radiology.

Related posts:

  1. What Is A High Deductible Health Insurance Plan?
  2. What Is Health Insurance?
  3. What Are Archer Medical Savings Accounts For A Health Insurance Policy?
  4. What Is A Point Of Service Health Insurance Plan?
  5. What Does Major Medical Insurance On A Health Insurance Policy Entail?

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