Indemnity Plans Author:    Posted under: Health InsuranceHealth Insurance Types

Searching for the perfect health plan for you and your family may be a little bit tricky, especially if you are just starting to feel your way around the place:  so many terminologies to understand, and options to choose from.  One good thing about this is that there is a world of information out there for you to just view and study, so that you can make informed decisions about these vital concerns in your life.

One of those common insurance plans available is the indemnity insurance.  Also known as the “Fee-for-Service” plan, it is considered to be the most expensive plan in the market.  It offers the most flexibility in terms of having to choose which physician you want, or which hospital you want to avail services from, unlike when enrolled under a health maintenance organization or HMO plan.  This is, most likely, the choice of those who are chronically ill and would need specialized care.

The flexibility of this plan comes with a price.  Indemnity plans come with a high deductible, or the amount that you would have to shell out from your own pocket, even before any benefits are given to the insured.  There is also what we call a co-payment for services, wherein the company and the client split the cost into 70-30 or 80-20, the bigger percentage shouldered by the insurance company.  Therefore, make sure that your policy includes a limit to your “out-of-pocket spending.”  This means that you would eventually reach a ceiling for the services that you have spent for, and beyond that agreed amount, the insurance is responsible for shouldering costs.  You would also need to know that for indemnity plans, you should be ready to shell out the amount first, and then process a claim with the insurance company.

Indemnity plans cover the usual expenses like doctors’ fees, tests, and prescription drugs.  However, preventive check-ups are not included in this plan.  In addition, there is also a high probability that the cost of professional fees may not be what is deemed “reasonable and customary” by the insurance company.  When you file a claim under the indemnity plan, it is still subject to approval in terms of how much the service you availed cost in the market, and compared to other claims of the same nature as well.  If in case your health care provider charges a higher amount than what is usual, then expect to pay for the difference in the amount based on the approved cost.

Again, the indemnity plan is only an option that is offered to you.  Do not rush in deciding which plan works best for you and your family.  Remember that it is always good to account for your budget, and what your family needs, then strike a reasonable compromise between the two.  Don’t forget: ask questions and clarify, then make that decision.  Good luck!



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