Why YOU should consider an Indemnity Health Plan for your health insurance coverage! 

Health Insurance plans that enable you to go to any doctor or specialist you choose without requiring a referral are called indemnity, fee-for-service, or point of service (POS) plans. With these plans, the insurance carrier will pay a set portion of your expenses and you are responsible to pay the remaining balance—if there is one. These plans offer the most flexibility as they do not set restrictions on the medical providers you can use, and they typically do not require that you choose a primary care physician (PCP).

Many people are scared of indemnity plans, but usually their fears are unfounded. We fear what we do not understand. In the health insurance world, we understand co-insurance, co-pays, and deductibles. Unfortunately, too many people refuse to seek to understand an indemnity plan which is set up differently. And the result of this leads to 2 typical decisions: 1) Choosing to have no health insurance at all; or, 2) Choosing a very costly health insurance plan that can be inferior to an indemnity plan.

The best indemnity plans include medical coverage, such as hospital, emergency room, doctors, prescriptions, surgery, etc. (all the medical services one would expect on a health insurance plan), bundled with an enhanced accident add-on that kicks in and pays IN ADDITION to the medical part of the plan should one have some kind of an accident (such as falling and breaking one's ankle), and a specified disease add-on that pays IN ADDITION to medical part of the plan, should one be diagnosed with cancer, heart attack, stroke, renal failure, and the like.

A good indemnity plan includes things like FREE telemedicine, FREE assistance should there be a medical billing issue of consequence, and FREE accidental death life insurance (up to $150,000 included in the plan). And while a good indemnity plan allows one to obtain medical services anywhere one chooses, it also includes a robust network that provides generous network discounts, should one decide to go “in-network” for medical services.

It is important to note this: Indemnity plans are NOT considered major medical. That shouldn't scare one away from it though. Here’s why:

Indemnity plans are GREAT options for generally healthy persons who make a decent income and would NOT qualify for subsidies and tax credits from the healthcare marketplace (ACA). Indemnity plans do require underwriting—they are typically NOT guaranteed issue like an ACA plan offered through the healthcare exchange. But again, if you are in generally good health, don’t have a lot of “pre-existing conditions” (typically, an indemnity plan will not pay for a medical event surrounding a pre-existing condition for a period of 12 months from the date of enrollment in the indemnity plan), and make enough income to not qualify for marketplace subsidies and tax credits (For example, in 2021: Over $51,520 for one person in household; $69,680 for 2 persons in household; and $106,000 for 4 persons in household), then an indemnity plan can save one at least 40% off the cost of premiums compared to other plans. 

Something else to keep in mind when comparing and indemnity plan with a marketplace plan or other major medical plans: The high cost of deductibles! If someone doesn’t qualify for subsidies and tax credits with an ACA health plan, that person is looking at a minimum of $7,000 deductible in 2021. The ACA plan isn’t going to pay a penny for health services until that deductible is met. An indemnity plan typically doesn’t have deductibles other than perhaps a “Confinement Deductible” for the first night of an overnight hospital stay. There is also no co-insurance or co-pays with an indemnity plan. So, what that means is that the indemnity plan is going to always pay the stated amount in the policy agreement. For example: If the stated amount to see a physician is $160, and the physician charges one $100, then guess what? That person with an indemnity plan gets to put $60 in his/her pocket. 

Indemnity health plans can be a fantastic, cost-effective way to cover one and one’s family with health insurance. I’ve only scratched the surface with this little blog post about how an indemnity plan could work for you and those you care about. If you have any questions, or want to know more, I would be happy to help you. You can now even book an appointment with me on the website.