How does an indemnity plan work?

A traditional Indemnity plan offers a great deal of freedom in choosing which doctors and hospitals to use, but will probably involve higher out-of-pocket costs and more paperwork.  Under an Indemnity plan, you may see whatever doctors or specialty you like, with no referrals required.  Though you may choose to get the majority of your basic care from a single doctor, your insurance company will not require you to choose a primary care physician.  An Indemnity plan may also require that you pay up front for services and then submit a claim to the insurance company yourself.

You may have an annual deductible that will need to be met before the insurance company begins to pay on your claims.  Once your deductible has been met, the insurance company will typically pay your claims at a set percentage of the “usual and customary” (UCR) allowance for that services. The UCR rate is the amount that healthcare providers in your area typically charge for any given service.