Indemnity insurance is the most traditional form of health coverage. With these plans, you have complete freedom to choose your healthcare providers, but you'll generally pay higher costs and handle more paperwork than with managed care plans.
Complete Provider Freedom
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How Payment Works
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Higher Out-of-Pocket Costs
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Although indemnity insurance used to be the most common type of coverage, very few insurance companies offer these plans anymore. Most insurers have shifted to managed care models to control costs.
Click here to view the Indemnity health plans available.
What This Means:
Your insurance will only pay up to what they consider a "reasonable and customary" amount for medical services in your area. If your doctor charges more, you pay the difference.
Real-World Example:
Your doctor's charge: $1,000 for hernia repair
Average cost in your area: $600
What insurance covers: Based on the $600 average
What you owe: The $400 difference, PLUS your regular deductible and coinsurance
Before any procedure, ask your doctor:
"Will you accept my insurance company's approved amount as full payment?"
"What do you typically charge for this service?"
Contact your insurance company:
Ask what they consider "reasonable and customary" for the procedure
Get this information before scheduling treatment
Shop around:
Find doctors who will accept your insurance payment as full payment
Compare costs between different providers in your area
With indemnity insurance, always confirm costs upfront. The freedom to choose any provider comes with the responsibility to understand what you'll actually pay out-of-pocket.
How much is the monthly premium? Find out what your total cost will be each year. There are individual rates and family rates.
What does the policy cover? Does it cover prescription drugs, out-of-hospital care, or home care? Are there limits on the amount or the number of days the company will pay for these services? The best plans cover a broad range of services.
Are you currently being treated for a medical condition that may not be covered under your new plan? Ask if there are limitations or a waiting period involved in the coverage.
What is the deductible? Often, you can lower your monthly health insurance premium by buying a policy with a higher yearly deductible amount.
What is the coinsurance rate? Find out what percent of your bills for allowable services you will have to pay.
What is the maximum you would pay out of pocket per year? Understand how much it would cost you directly before the insurance company would pay everything else.
Is there a lifetime maximum cap the insurer will pay? The cap is an amount after which the insurance company won't pay anymore. This is important to know if you or someone in your family has an illness that requires expensive treatments.
