What is an Indemnity Plan?
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 precertify 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 PPOs. You may have few or no indemnity plan choices in your area.
A traditional plan, commonly known as a traditional plan, does not utilize a provider network. You have the freedom to go to any provider for services; however, the services are not discounted because there is no network. As a result, you may rack up out-of-pocket expenses quicker than you would with a PPO or HMO Plan.
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 dentist. You do not need referrals or authorizations; however, some plans may require you to precertify 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 dental indemnity plans also require a waiting period before covering certain services.
Related Questions
- Is the provider payment from Medicare different under the Aetna Medicare Open Plan than the Traditional Choice Indemnity Plan? Are providers bound by the same rules and regulations?
- What is the difference between an HMO and a PPO insurance plan? What if my plan is an "indemnity" insurance plan?
- Can I stay in the Traditional Choice Indemnity Plan instead of moving to the Aetna Medicare Open Plan?
