Why an Indemnity Plan Might Be Right for You

Everyone will need health care at some point in their lives. It could be as simple as getting treatment for a 24-hour bug or as intensive as receiving care for a major illness or emergency. Whatever the case, life happens and illness and injury are inevitably a part of it. Securing the right health care plan under an insurance policy that works for you is the best way to minimize the financial losses you may incur because of health needs; however, there are sometimes instances where quality and availability of care take priority. For maximum flexibility with your health care, consider an indemnity plan.

What is an indemnity plan and how does it work?

Indemnity plans provide all of the perks of an individual or group policy while offering the ultimate freedom of choice. If you want to be able to select your doctor, primary physician, hospital, or treatment plan freely, an indemnity plan could be right for you. Indemnity policies allow patients to visit virtually any doctor who accepts the insurance provided by their insurance company of choice. Generally, indemnity plans function as follows:

• Rather than offering co-payments and fees that vary depending on the type of visit, indemnity plans give free reign to policyholders to see who they like without the need for a referral while charging a set rate for every single visit. Indemnity plans are often referred to as “fee-for-service” plans because of this feature.
• Generally, the policyholder will pay upfront for each service and submit a claim for future reimbursement of the portion owed back to them in accordance with the predetermined rate.
• Policyholders usually pay an annual deductible before co-payments are offered. Once the deductible has been met, the insurance company will pay claims at a predetermined rate called a UCR rate. The “usual, customary, and reasonable” rate for service is calculated by estimating the amount that providers within a given geographical region typically charge for health care services.

What benefits do indemnity plans provide?

• Select your doctor, physician, care plan or hospital without the need for a referral or the requirement to remain “in-network.”
• Selection of a primary care physician is optional and not a requirement.
• Access to specialists and alternative treatment plans that may have been off limits with a traditional health care policy.

Who is an ideal candidate for an indemnity plan?

Indemnity plans are helpful for anyone that wants greater freedom of choice in regard to their health insurance; however, there are a few special situations where indemnity plans can prove especially beneficial:

• Those with COBRA benefits that are about to expire are great candidates for the indemnity plan. COBRA is notorious for being a pretty pricey insurance option, so those willing to pay COBRA fees won’t see much of an impact on their wallets by switching to an indemnity plan and will gain a wider range of options.
• Retirees disinterested in Medicare and seeking alternative health care policies will have access to the best care possible should they opt for an indemnity plan.
• Those combating long-term critical illnesses such as cancer often desire access to as many treatment options as possible and the indemnity plan satisfies this need.

Although policyholders see greater costs, the payoff is in the wider range of choices. It is important to note that some plans do not cover preventative services, so check with your insurance provider prior to purchasing a plan and assess your options. Ultimately, indemnity plans put the policyholder in the driver’s seat, and those willing to invest a little more in their health care will see greater quality and abundance of care.