Indemnity plans allow enrollees to direct their own health care and see almost any doctor or hospital of their choosing. The insurance company then pays a set portion of their total charges. Indemnity plans are also referred to as fee-for-service plans.
How an Indemnity Plan Works
Under an Indemnity plan, an enrollee can see whatever doctors or specialists they want to, with no referrals required. The enrollee does not need to choose a primary care physician. An Indemnity plan may also require enrollees to pay up front for services and then submit a claim manually for reimbursement.
A schedule of maximum charges for providers who charge on a fee-for-service basis.
Deductibles and Claim Payout
The enrollee likely be required to pay an annual deductible before the insurance company pays out any claims.
Once the deductible has been met, the insurance company will typically pay claims at a set percentage of the "usual, customary, and reasonable (UCR) rate" for the service. The UCR rate is the amount that healthcare providers in the enrollee's area typically charge for any given service. UCR may also be referred to asReasonable and Customary Charge(R&C).
Always refer to the plan's Summary of Benefits and Coverage for details about the plan, including deductible amounts and any limitations/restrictions.