Health insurance has come a long way over the past few decades, witnessing drastic changes. But with the right type of plan, you can still control your healthcare choices in the best possible way.
Also referred to as fee-for-service plans, a Traditional Indemnity plan is a healthcare plan that allows you to choose the doctor, healthcare professional, hospital, or service provider of your choice and gives you the greatest amount of flexibility and freedom in a health insurance plan.
Though you may choose to get the majority of your basic care from a single doctor, your insurance company will not require you to choose a primary care physician.
Following are the types of Indemnity Health Insurance plans:
- Hospital and surgery insurance coverage
- Major medical insurance coverage
- Comprehensive coverage—a combination of hospital and major medical plans
How does it work?
Under an Indemnity plan, you may see whatever doctors or specialists you like, with no referrals required. However, an Indemnity plan may also require that you pay upfront for services and then submit a claim to the insurance company for reimbursement.
You’ll likely be required to pay an annual deductible before the insurance company begins to pay on your claims. Once your deductible has been met, the insurance company will typically pay your claims at a set percentage of the “usual, customary, and reasonable (UCR) rate” for the service. The UCR rate is the amount that healthcare providers in your area typically charge for any given service.
However, indemnity plans are not always for reimbursement. It does work like traditional insurance in some cases, where a member simply offers their card for the provider to process all their claims. The premiums are generally half of major medical and the deductible only applies to in-patient services, while the out-patient services are payable with no deductible or co-insurance.
Pros & Cons
As already mentioned, one of the biggest advantages you get from choosing a Traditional Indemnity plan is flexibility. You have the freedom to choose your preferred health care facility and provider without any restrictions.
While one of the downsides to this is that you may have to pay more for your health insurance coverage than if you choose a PPO Plan or an HMO Plan. Also, some preventive care services such as wellness check-ups and other routine care may not be covered by an Indemnity Health Insurance plan.
An Indemnity plan may be right for you if:
- You don’t want to designate primary care physicians or get referrals to get specialists
- You want to freely visit any physician you choose
Of course, such a type of plan is not right for everyone. Hence it is important to do the needful research and sit down with your family insurance agent to discuss the benefits of each type of health insurance plan, so you can make a decision that will give you and your family the best value on a health insurance policy.