An indemnity health insurance plan is different than policies offered by HMOs and PPOs because there’s no provider network, so patients can choose their own doctors and hospitals. These “fee-for-service” or traditional plans existed before the rise of HMOs and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company or self-insured employer pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. 

The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose with generally more out-of-pocket charges in the form of deductibles and copayments. 

Some indemnity health insurance plans may not cover preventative services, such as mammograms, annual physicals, or immunizations. Indemnity plans are subject to preexisting condition clauses so it’s important to read the fine print including terms and conditions of what is covered and what is not covered. 

If you choose a Indemnity health plan, it’s important to know the key features:

  • You have the freedom to see any medical provider and use any facility for covered services, but you and your covered dependents must file claims to be reimbursed.
  • Depending on the provider, you may have to pay for the cost of your health care services when you receive them, or you may be billed directly for any services provided.
  • You don’t need referrals for specialists or authorizations. However, some plans may require you to precertify for certain procedures.
  • There are no geographic limitations for services provided or coverage area. If you are traveling away from your home, you can seek medical help without concern about whether your insurer will cover your care.

The choice between managed care and indemnity plans ultimately depends on your personal circumstances and preferences. If your goal is to minimize costs, you’re probably better off with a managed care plan. On the other hand, if your goal is maximum flexibility and cost is not a major factor, you should consider an indemnity plan. If you have immediate questions, call us toll free at 330-633-3837 or click here to email us your name and phone number for us to call you.