Overview on USA Healthcare Insurance - Indemnity Insurance/Non-Network Coverage

Indemnity Insurance/Non-Network Coverage

Indemnity Insurance is also called as Non-Network based coverage. Such type of coverage offers the customer more flexibility in choosing the doctors, hospitals and other healthcare providers under the ambit of the plan. Usually, the individual can choose any medical practitioner or doctor he/she desires and has the liberty of changing the doctors at any time, as desired. Although the policyholder usually does not need a referral to consult a specialist or avail X-ray test or other pathological examinations, he/she may need documents or paperwork for example medical records, from your primary care physician or family physician.


If an individual possesses Indemnity Insurance, then such a health-plan only reimburses a part (or portion) of the total incurred medical expenses. The rest of the medical expenses incurred as part of the treatment has to be borne by the concerned individual. It is likely that the individual's Out-Of-Pocket costs are likely to be higher for certain healthcare services as compared to some Managed Care Plans. Under such a policy, the individual will need to spend a certain amount each year (i.e. Premium) before the particular plan begins to pay the benefits. This amount is called a deductible.

Remember, each healthcare plan varies in what they pay. No healthcare insurance policy will pay 100 percent of the incurred medical expenses. But there are certain healthcare policy covers that will pay more than the others. Deductibles are defined as the amount of the covered expenses that an individual must pay yearly so as to get the desired benefits and reimbursements from the healthcare insurance product and services availed by the individual. If an individual possesses an indemnity plan, he/she may be required to do more paperwork or documentations for example, collection of medical records etc. There are instances when certain hospitals or doctors submit the claim on the customer's behalf. Once the hospital or the doctor receives payment from the insurance company, he or she will bill the individual for the difference. Indemnity insurance only reimburses a portion of the incurred medical expenses bill�usually 80 percent, after the deductible has been met, although this may vary from policy to policy. The concerned policyholder has to pay the remainder, usually 20 percent of the total medical bill. This is called as Co-insurance. Indemnity policies typically have an Out-Of-Pocket maximum. This means that once the concerned policyholder's incurred medical expenses reach a certain amount in a given calendar year, the fees for covered benefits typically will be reimbursed in full by his/her insurance plan. Incase, if the treating consultant bills the policy holder in excess than the reasonable and customary charges incurred on medical treatment, the concerned individual possibly may have to bear a portion of the incurred expenses. If the individual possesses Medicare health insurance cover, usually caps or limits are applicable regarding the fees charged by the concerned physician for expenses above the usual amount. There may also be lifetime limits on benefits paid under the Indemnity Insurance Plan. Most experts recommend that while purchasing a health insurance product or service, he/she should look for a policy with a lifetime limit of at least 1 million USD. Anything less may be insufficient to meet the requirements of the individual.

References:

1. DEFINITIONS OF HEALTH INSURANCE TERMS - (http://www.bls.gov/ncs/ebs/sp/healthterms.pdf)
2. Glossary of Insurance Terms - (http://www.ambest.com/resource/glossary.html)
3. Patients & Consumers - (http://www.ahrq.gov/CONSUMER/insuranceqa/insuranceqa.pdf)

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