What is a Indemnity Plan?

by admin on June 29, 2009

An indemnity plan is commonly known as a fee for service or traditional plan. If you select an Indemnity plan you have the freedom to visit any medical provider. You do not need referrals or authorizations; however, some plans may require you to pre-certify for certain procedures. Most indemnity plans require you to pay a deductible. After you have paid your deductible, indemnity policies typically pay a percentage of “usual and customary” charges for covered services; often the insurance company pays 80% and you pay 20%. Most plans have an annual out of pocket maximum and once you’ve reached this they will pay 100% of all “usual and customary” charges for covered services.

Many health insurance companies have moved away from indemnity plans and are instead offering managed care plans such as HMOs and PPO’s. You may have few or no indemnity plan choices in your area.

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