This is the ‘free-for-service’ plan where an insurance company provides medical or other health services. Either a fixed amount is paid for some specific illnesses or a certain percentage of the patient’s bills are shared by the insurance provider. If the required medical service is covered under a policy, it becomes the responsibility of the insurance company to indemnify the patient and reimburse the amount according to the provisions in the policy. Some indemnity plans also exist where the plans aren’t based on in-network providers or even those where payments are not a percentage of provider’s costs.
Benefits of indemnity plans
- They offer a higher degree of flexibility when the patient chooses a hospital or doctor. It is not mandatory for your doctor to be from in-network and you may change the doctor anytime you wish.
- A portion of your medical bills will be paid by the insurance provider for indemnity insurance.
- After you have covered paying the scheduled amount, the insurance provider will take charge of your entire medical care.
- After your deductibles have been met, almost 80 percent of your healthcare expenses will be paid by your care provider.
- There is a threshold to out-of-pocket expenditure in any indemnity plan. The moment you will reach a certain amount in a calendar year while paying your medical costs, the rest will be typically taken care of by your plan provider.
- With an indemnity plan, it is better to have a Medicare plan as well. This will prevent your doctor from charging you ransom fees.
- Indemnity plans provide lifetime limits on whatever benefits will be paid under the policy.