The Disadvantages of Indemnity Insurance

To ensure that all patients receive the proper level of treatment and coverage that best fits their needs, they should be aware of all the different options of health insurance available. Indemnity insurance policies benefit people that travel often or have expensive health care needs, or unhealthy elderly people. This type of insurance might not be as beneficial to those with less medical needs or people in good health. The biggest disadvantages to indemnity insurance policies include high costs, excessive paper work, high deductibles and lack of preventative care.

Higher Price

• Indemnity insurance plans are typically more costly than other types of insurance plans available to the public. While it does offer more flexibly and freedom to get care from a variety of different doctors, plan holders definitely pay a higher price. A higher price means a higher monthly premium, and a higher deductible that is paid annually before the insurance company can begin to reimburse for medical expenses.

Paperwork and Upfront Payments

• A big disadvantage of indemnity insurance plans is all the paperwork required. Indemnity insurance policies require policyholders to pay upfront for their medical expenses, resulting in a great deal of paperwork in order to receive their reimbursement checks. Having to pay upfront can also be an issue for policyholders who do not have the funds to visit the doctor when needed.

Coinsurance

• Policyholders are also require to make additional financial contributions of anywhere between 20 to 30 percent of the medical treatment costs. This is known as coinsurance, and it offsets the medical cost. It is especially crucial for policyholders to know what the exact policy coverage is, as only those medical expenses specified in the policy are covered.

Lack of Preventive Care

• Another disadvantage of indemnity insurance is the lack of preventive care coverage. These types of policies do not cover doctor check-ups, immunizations or pelvic exams. As indemnity insurance companies realize the importance of preventive care for long-term health, more companies are beginning to offer coverage on such services. However, coverage does vary widely, and patients who need insurance primarily to cover the cost of routine preventative care might find a better plan elsewhere.