Medical Indemnity Insurance: Understanding How It Works
Medical indemnity insurance, also known as fee-for-service insurance, is a type of health insurance that gives you the freedom to choose any licensed healthcare provider and use any licensed facility for covered services. You or the provider sends the bill to the insurance company, which pays part of it. Usually, you have a deductible—such as $200—to pay each year before the insurer starts paying.
Medical indemnity insurance plans typically cover a wide range of medical services, including:
- Doctor visits
- Hospital stays
- Surgery
- Prescription drugs
- Preventive care
- Mental health care
- Emergency care
However, some services may not be covered, or may only be partially covered, depending on the plan. It is important to read the plan’s summary of benefits and coverage (SBC) carefully to understand what is and is not covered.
Medical indemnity insurance plans can be more expensive than other types of health insurance plans, such as health maintenance organizations (HMOs) and preferred provider organizations (PPOs). However, they offer more flexibility in terms of choosing healthcare providers.
Here are some of the pros and cons of medical indemnity insurance:
Pros:
- Freedom to choose any licensed healthcare provider and use any licensed facility for covered services
- No referrals required for specialists
- Comprehensive coverage for a wide range of medical services
Cons:
- Can be more expensive than other types of health insurance plans
- You may have to pay out-of-pocket costs upfront, and then file a claim with the insurance company for reimbursement
- Some services may not be covered, or may only be partially covered
Medical indemnity insurance may be a good option for people who:
- Want the freedom to choose any healthcare provider they want
- Have complex medical needs
- Live in an area with limited access to other types of health insurance plans
If you are considering medical indemnity insurance, it is important to shop around for different plans and compare prices and coverage. You should also speak with a financial advisor to get help choosing the right plan for your needs.
