About Health Insurance Indemnity Plans

There are a variety of individual and group health insurance plans available. One common type is a health indemnity plan. An indemnity plan can be an attractive option for people who want maximum freedom of choice regarding their health care coverage.

Identification

• A health indemnity plan is a also known as a fee-for-service plan. The insured is free to see virtually any doctor or specialist he chooses without the restrictions of the networks that are part of managed care plans like PPOs and HMOs.

Process

• With an indemnity plan, the insured pays for covered services out of her own pocket and is then reimbursed by the insurance carrier. The policyholder typically pays a monthly premium and must pay a deductible, which is the amount that must be paid out of pocket before coverage begins.

Considerations

• Although a health indemnity plan allows for more freedom of choice, there are some drawbacks. Because there is no network to keep costs down, the overall costs to the policyholder may be higher than with managed care plans. They also do not cover the cost of preventative care such as check ups and screenings.