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Health Insurance Guide
Understanding A Traditional Indemnity Health Insurance Plan
Health Care Insurance Types - Fee For Service Plans
With continually rising medical costs and health insurance premiums traditional indemnity health insurance plans are no longer the popular choice which they once were, but they do nevertheless still provide a valuable option for many people.
The great advantage of indemnity health insurance plans lies in the freedom which they give to the plan holder to select the care which he requires, where and when he requires it. This advantage however comes at a price.
Once you have received the necessary medical treatment the provider’s bill will have to be paid and, in most cases, this means that, in the first instant, the plan holder will be required to pay the bill. The bill is then sent to the insurance company who will check to see that the treatment is covered by the plan and check the bill against its own list of "customary and reasonable" charges for the treatment in question. Providing the bill is considered to be reasonable the insurance company will then reimburse the policyholder, normally paying about 80% of the bill, or whatever proportion is specified in the plan.
Under an indemnity health insurance plan the plan holder can undergo treatment wherever he wishes and, if he chooses to do so, he can elect to be treated by a leading specialist who would normally charge well above the average price for the treatment being given. If this happens, the insurance company will merely pay that part of the bill which it considers to be reasonable for the form of treatment in question, with the plan holder being required to meet the balance of the bill.
As well as paying a proportion of each bill, individuals who select indemnity health insurance plans are also required to pay a monthly (or occasionally quarterly or annual) premium and an annual deductible, which represents a sum of money to be paid by the policyholder every year towards the cost of medical treatment before the insurance company will begin to meet the cost of medical bills. Despite the fact that these costs can be high, this form of health insurance suits many people.
Carve-out companies: Organizations that have specialized provider networks and are paid on a capitation or other basis for a specific service, such as mental health, chiropractic, and dental.
Functional status: A patient's ability to perform the activities of daily living.
Medicaid: A jointly funded federal and state program that provides hospital expense and medical expense coverage to the low-income population and certain aged and disabled individuals.
Risk-adjustment: The statistical adjustment of outcomes measures to account for risk factors that are independent of the quality of care provided and beyond the control of the plan or provider, such as the patient's gender and age, the seriousness of the patient's illness, and any other illnesses the patient might have. Also known as case-mix adjustment.
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