Indemnity Health Insurance: Coinsurance and Excess Payments

Indemnity health insurance is an excellent option for medical coverage if you are a consumer who wants to have the most flexible type of insurance policy. With indemnity health insurance, consumers pay some of the highest premiums in order to to have the luxury of choosing all their own health care providers. Once a deductible for an indemnity health insurance policy is met, the coverage kicks in to offset the amount of money a consumer would pay to get the medical attention they need.


When the coverage of an indemnity health insurance policy kicks in, it is generally a type of “coinsurance” structure. Coinsurance is when members are required to pay a fraction of the cost of the medical expenses while the indemnity health insurance policy provider would be required to pay the remaining balance. It is not unusual for members of an indemnity health insurance plan to pay up to 30% or more of their portion of the coinsurance that is due.

Excess Payments

Excess payments is another way insurance companies offset their costs of providing members with medical insurance coverage. Anexcess amount is the dollar amount that must be paid before the insurance company will cover your medical expenses, also known as a deductible. There is a direct relationship between excess payments and the premium rate you would pay to maintain an indemnity health insurance plan. The lower the excess amount you agree to, the higher the premium you will need to pay.

When it comes to selecting a medical insurance plan such as an indemnity health insurance policy, it is important that you calculate all the expenses so you can handle your plan financially. The overall cost of an indemnity health insurance plan is made up of premiums, coinsurance and excess payments. Make sure to weight them all when deciding if this type of policy is right for you.