Indemnity Health Plans
An Indemnity Health Plan, also known as a Fee-For-Service
Health Plan, offers you the most choice of any health plan
– but at a price.
With an Indemnity Health Plan there are no in-plan doctors
or specialists or hospitals. With an Indemnity Health Plan
you choose your own doctor or specialist or hospital with
no regard for whether they are in-plan or not. Many people
appreciate the unlimited choices that an Indemnity Health
Plan makes possible.
The trade-off is cost. With an HMP or a PPO or a POS health
plan there are doctors, specialists and hospitals which have
agreed to reduce prices in order to be part of the plan. That’s
not the case with an Indemnity Health Plan.
While details may vary from plan to plan, in most cases if
you have Indemnity insurance you choose your own health care
professional and you pay the bill for services out of your
own pocket. Then, assuming you have met your deductible, your
insurance will reimburse you for a portion of the bill you
paid. Often plans will pay 80 percent, although this amount
may vary depending on the plan you choose and the premium
With a fee-for-service plan you’ll be responsible for
paying monthly premiums and there will be a deductible before
any medical fees are paid by insurance. Even after you have
met your deductible there will still be a per-visit co-payment
or coinsurance payment for each doctor visit.
Also, with many Indemnity plans preventative health care
check-ups are not covered and do not count toward your deductible.
There are three major types of Indemnity Health Plans. There
are Basic, Comprehensive and Major Medical.
Basic coverage covers hospital room and board and basic care,
plus x-rays and most medications prescribed in the hospital.
Basic care also covers surgery, both in-patient and out-patient
surgery, and your Basic policy will cover many doctor visits.
Major Medical generally only covers long-term care for illness
or injury and will cover both in-patient and out-patient expenses.
Comprehensive Care generally combines both the Basic and
the Major Medical coverage.
While Indemnity Insurance offers a wide range of choice,
the cost of premiums, plus the fact that most policies exclude
coverage for preventative health care often makes Indemnity
coverage impractical or too expensive for families with children.
Before signing up for an Indemnity plan it is important that
you consider your options and, if possible, talk with someone
knowledgeable about health insurance, one who can help you
better understand your choices.