Indemnity Health Insurance

Indemnity Health Insurance is paid to the covered person in the form of cash for he/she had spent in his/her medicare. However, it is not provided as service. Indemnity plans usually consists of PPO option, UR and case management features or include a network or other preferred provider restrictions. However it doesn’t include an HMO plan. In short, it is a plan, which reimburses to physicians for services performed or to beneficiaries for medical expenses incurred. And it is different from group health insurance, which provide service benefits through group medical practice.

In most of the indemnity policies, beneficiaries are free to consult any doctor and can admit to hospital of their choice. However, some policies restrict to a few areas only. While getting an indemnity policy, one may come across with a term called deductible. It is the amount, which the beneficiary is required to pay before the policy benefits are provided. It is upto the recipient how much he/she wants to keep as deductible. Once the beneficiary is eligible for payment and deductible are clear, then the remaining charges are reimbursed to the recipient at a specified percentage according to the policy contract.

Copayment, which is the difference between eligible charges and the percentage, is another term that beneficiaries will come across. The policy or an employee benefit booklet (in case of indemnity policy is group coverage) is the terms and conditions of what is covered and what are not covered.

There are some limitations for indemnity insurance as well, like once your expenses reach a certain amount in a given calendar year, the insurer will pay the usual and customary fee for covered benefits in full and you no longer pay the coinsurance. Again on the other hand, if the doctor’s bills are more than the usual customary charge, then you may still have to pay a portion of the bill.

Health insurance coverage can be categorized on the following two headings:

Indemnity Plans

Reimbursement, in this, is done in two different ways:

Indemnity

Here, the insurer reimburses a specified amount on a daily basis for a specified maximum number of days. Even though the reimbursement amount does not depend on the actual cost, it never exceeds the actual expenses. In this plan, one has the freedom to visit any medical provider.

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