I keep seeing a references to indemnity plans. What type of health plan is this?
An indemnity plan is a type of medical plan that reimburses the patient and/or provider as expenses are incurred.
Indemnity Plans: Types
Let’s review some examples of indemnity plans:
- Conventional indemnity plan – An indemnity that allows the participant the choice of any provider without effect on reimbursement. These plans reimburse the patient and/or provider as expenses are incurred.
- Preferred provider organization (PPO) plan – An indemnity plan where coverage is provided to participants through a network of selected health care providers (such as hospitals and physicians). The enrollees may go outside the network, but would incur larger costs in the form of higher deductibles, higher coinsurance rates, or non-discounted charges from the providers.
- Exclusive provider organization (EPO) plan – A more restrictive type of preferred provider organization plan under which employees must use providers from the specified network of physicians and hospitals to receive coverage; there is no coverage for care received from a non-network provider except in an emergency situation.
- Health maintenance organization (HMO) – A health care system that assumes both the financial risks associated with providing comprehensive medical services (insurance and service risk) and the responsibility for health care delivery in a particular geographic area to HMO members, usually in return for a fixed, prepaid fee. Financial risk may be shared with the providers participating in the HMO.
- Group Model HMO – An HMO that contracts with a single multi-specialty medical group to provide care to the HMO’s membership. The group practice may work exclusively with the HMO, or it may provide services to non-HMO patients as well. The HMO pays the medical group a negotiated, per capita rate, which the group distributes among its physicians, usually on a salaried basis.
- Staff Model HMO – A type of closed-panel HMO (where patients can receive services only through a limited number of providers) in which physicians are employees of the HMO. The physicians see patients in the HMO’s own facilities.
- Network Model HMO – An HMO model that contracts with multiple physician groups to provide services to HMO members; may involve large single and multispecialty groups. The physician groups may provide services to both HMO and non-HMO plan participants.
- Individual Practice Association (IPA) HMO – A type of health care provider organization composed of a group of independent practicing physicians who maintain their own offices and band together for the purpose of contracting their services to HMOs. An IPA may contract with and provide services to both HMO and non-HMO plan participants.
- Point-of-service (POS) plan – A POS plan is an “HMO/PPO” hybrid; sometimes referred to as an “open-ended” HMO when offered by an HMO. POS plans resemble HMOs for in-network services. Services received outside of the network are usually reimbursed in a manner similar to conventional indemnity plans (e.g., provider reimbursement based on a fee schedule or usual, customary and reasonable charges).
- Physician-hospital organization (PHO) – Alliances between physicians and hospitals to help providers attain market share, improve bargaining power and reduce administrative costs. These entities sell their services to managed care organizations or directly to employers.
The above health care plan options can be confusing. We can discuss your health care plan options by phone or we can schedule a webinar at your convenience where you can see the exact benefits offered by each of the plans described above.
Call 740.535.6440 or contact us via email to setup a day/time that’s convenient for you to discuss your current health care coverage! It may be the most informative 2-3 minutes of your life.