An indemnity plan is a type of fee-for-service plan, which means that the policyholder can get service from any doctor or hospital when needed, without having to make sure that it is part of the insurance company’s provider network. This gives patients great flexibility when it comes to their health care, making it the health plan choice for people with serious and chronic illnesses who need to go to the doctors of their choice.
For indemnity plans, the insurance company usually asks the patient to pay the fees upfront and reimburses only a certain percentage of the medical, usually 70 to 80 percent. The rest of the amount, which isn’t reimbursed, is call coinsurance. However, most plans also have a “cap”, which is the maximum out-of-pocket expense a patient can pay out each year for their medical bill. Once the cap is reached the insurance company pays for all the medical bills incurred as long as all procedures done are covered under the policy.