What is an Indemnity Plan?

Although the majority of Californians choose group health insurance such as PPO or HMO health insurance plans, these may not necessarily be the right choices for everyone. Thankfully, there’s another option: the indemnity plan. Indemnity plans provide their subscribers with more freedom than other types of individual health insurance plans.

Comprehensive indemnity plans combine basic coverage, which covers routine care and hospitalization, and major medical, which comes into play when there is a serious injury or major illness. As with other health insurance plans, indemnity health plans have certain expenses and limitations associated with them.

An indemnity plan will often cover medical expenses it deems usual, customary, and reasonable as well as treatments it considers medically necessary. Any costs above what the insurance company pays will be your responsibility. You may also have to pay upfront for some services and be responsible for ensuring the paperwork necessary for reimbursement is filed.

Deductibles, copayments, and co-insurance may also be a part of your indemnity plan as well. You’ll be responsible for paying the full amount of the deductible before your insurance company will pay for any of your medical care, while the copayment is your standard payment for an office visit, prescription medications, and certain other services. Co-insurance is a set percentage you agree to pay for your care once your deductible has been met. Co-insurance is often between 10 and 50 percent of the total bill. High deductibles and co-insurance percentages can keep your monthly premiums lower.

With an indemnity plan, you have the freedom to see any health care provider you want at any health care facility you choose. However, this freedom does come at a price. Those who are willing to trade some of that freedom for a more affordably priced plan may find that HMO or PPO health insurance plans are a better fit.

Source: Los Angeles Health Care

Back to Blog