Disadvantages of Indemnity Health Insurance

Everyone is unique and requires different options from their health insurance to ensure that they get the level of treatment and type of coverage they are comfortable with. If you are a free spirit who often travels for business or pleasure and don’t want to be locked into a specific “system,” an indemnity health insurance policy may be for you. Indemnity health insurance is the most flexible type of medical insurance as it will provide members with insurance coverage for any doctor they choose to see, regardless of the state in which they see them. Freedom from indemnity health insurance certainly provides some advantages, however there are some disadvantages of indemnity health insurance you need to consider before opting into that type of coverage.

Disadvantages of Indemnity Health Insurance

  • High premium costs to maintain the insurance
  • Deductibles or excess payments must be met before the insurance starts helping offset your medical expenses
  • When the insurance does kick in, it is a coinsurance that requires the policy member to make financial contributions of anywhere from 20% to over 30% to offset the medical costs
  • Indemnity health insurance requires their members to pay their medical expenses up front and wait for reimbursement checks to be issued
  • Those who have indemnity health insurance are required to fill out their own paperwork to get their medical expenses reimbursed
  • Indemnity health insurance does not favor preventative medical care

Despite the drawbacks, there are many people who prefer indemnity health insurance over other policies that require using service network providers. If you travel excessively or have a favorite doctor that isn’t part of a network, the freedom provided by an indemnity health insurance plan can certainly outweigh any of the disadvantages.