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Indemnity Health Insurnace Plans |
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Historically, indemnity plans were the type most people had. An indemnity plan allows the policyholder to see any provider or hospital without restrictions to networks. With the development of larger HMO and PPO networks the higher cost of indemnity plans means few Insurance carriers offer such plans.
Indemnity plans are also sometimes referred to as a Fee-for-service plan. Most indemnity plans require the policyholder to see that the claim is sent to the insurance company who then reimburses the policyholder.
Most indemnity plans include a Deductible provision, which once satisfied then reimburse at a percentage of the "Usual Customary Reasonable" (UCR) charge for covered services. The insurer generally pays at the 80th or 90th percentile of the established UCR charge. In most cases this is adequate to fully reimburse the provider, but it may not be. If the provider charges more than the UCR rates, the policyholder is responsible for any difference. This should not be confused with Coinsurance which is another cost sharing feature now common to all types of plans as a means to lower Premium costs.
One must be careful in selecting an indemnity plan, but an indemnity plan may prove to be the best option especially in certain geographic areas were PPO networks are small or have limited participation due to lower than acceptable payments to providers. You should contact a local licensed certified field Broker/Agent who can inform you how these factors apply in you area and whether an indemnity plan may be best for you and your Family (see list of CSA agents).
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Indemnity