Unlike HMO and PPO health insurance plans, most indemnity policies allow you to choose any doctor and hospital that you wish when seeking health care services. Indemnity plans are considered fee-for-service health insurance plans. This means that you have the freedom to choose your health care services and as long as your services are eligible you will be charged a fee depending on how your policy rules are written. Sometimes indemnity health insurance plans cost more than HMOs and PPOs, but the payoff is the flexibility of choices.
If you have the opportunity to choose an indemnity policy for health insurance, here are five important points to remember:
1. You may have a deductible. The deductible is the amount you are required to pay before policy benefits are provided. If your health care charges are covered, or eligible for payment under the policy, your deductible will apply.
2. After the deductible, you may be required to pay a co-payment. A co-payment is a percentage you pay of the remaining charges after your deductible. For example: If your eligible charges are $800 and you have a $200 deductible, then that leaves $600 left. Say your co-payment is 20%. That means you are still required to pay 20% of the remaining amount of $600, which would be $120.
3. You often have the freedom to choose your doctor, specialist, or hospital with few, if any limitations.
4. Sometimes your options for a doctor, specialist, or hospital are limited by geographic restrictions, or area in which the provider is located.
5. Some indemnity health insurance plans do not cover preventative services. Preventative health care services include yearly check-up exams and other routine office visits that are designed to prevent illnesses. In addition, these services may not count towards your deductible.
Your indemnity policy booklet or your employee benefit booklet will spell out the terms and conditions of what is covered and what is not covered. Read your policy or benefit booklet before you need health care services and ask your health insurance agent, insurance company, or employer to explain anything that is unclear.