Basics of Indemnity Insurance

Posted in Fee-For-Service Plans , Health Insurance , Indemnity Health Insurance , Point of Service Plans

February 10th, 2009

Health insurance coverage typically falls into one of two categories: managed care and indemnity insurance. Managed care plans contract with specific health care providers and medical facilities in order to offer members care at reduced costs. Indemnity insurance plans, on the other hand, reimburse you for your expenses, no matter who youve gotten your service from.

Because of the associated freedom, some prefer the latter form of coverage. So lets take a moment to explore its basics.

How the Reimbursement Works

Under the indemnity insurance plan, you are reimbursed a percentage of what is considered to be a customary charge for the services covered in the plan. This differs from some health care insurance coverage that reimburses you for the actual amount you paid. In order to receive your reimbursement, you have to pay for the service up front in addition to a deductible then file paperwork to receive the refund. Additionally, you will be responsible for any charges that the insurance company wont cover.

What are the Provider Options?

Usually, you have some level of choice in a health care provider when working with indemnity insurance. In fact, many allow you to choose your primary care physician and dont require a referral to receive care from any other health care professionals.

What Else You Should Know about Indemnity Insurance

Here are a few other basics of this type of health care insurance coverage that you should keep in mind:

• This type of plan normally carries a much higher deductible than a managed care plan.
• There will be a lifetime limit on your policy, which means the more your policy is worth, the better.
• This health care insurance coverage doesnt cover preventive care, which includes check-ups.

Choosing whether to go with indemnity insurance or managed care can be tricky. So its a good idea to make the most informed decision possible by researching the benefits of both, as well as the best companies offering the best solutions for your needs.