Fee for Service (Indemnity) Plans
Indemnity policies, also called Fee-for-service plans, are the trademark of the insurance business. With this kind of policy, members pay a deductible as low as $250, which is a pre-established amount they agree to pay before the plan kicks in. Once the deductible is met, the subscribers pay a co-insurance of between 20-30% every time they go to the doctor or hospital for medical care, and the plan covers the rest. Subscribers must also pay a monthly premium to maintain the coverage
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Fee-for-Service Plan Details
There are many reasons someone would choose to enroll in a fee-for-service plan. First of all, a member of this plan has the freedom to choose any doctor to be their primary caregiver. Unlike other healthcare plans, members of a Fee for Service plan don't have to declare a primary provider. There are no gatekeepers (those who decide what is medically appropriate or necessary) and no networks with this plan. The second reason many people choose to enroll in a fee-for-service plan is that carriers place a “cap” on how much one person or family has to pay out-of-pocket per year. Currently it ranges from $1,000-$5,000. After a subscriber pays this maximum amount out-of-pocket, the insurance company is responsible for paying the rest of the member’s medical cost for the year.
There are two kinds of indemnity plans: major medical and basic. Basic coverage pays for the cost of hospitalization, including the room and any laboratory or prescription requirements. The major medical plan pays for expenses above and beyond confinement, especially in the case of long-term care for high-cost injuries or illness. A “comprehensive” plan combines these two coverage options into one.
Indemnity plans are best for those who don't expect to make a lot of trips to the doctor's office; families without small children often benefit from this kind of plan because they usually only require one annual check-up. Since subscribers to this plan are free to see any doctor around the country without paying more for service, fee-for-service plans are good for people who are on the go. A downside to this plan is that doctors will require that subscribers fill out their own claim work, and they will also have to keep receipts for prescriptions and other costs.
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