How do indemnity plans function?

Indemnity plans function by allowing insured individuals to select their healthcare providers without strict network restrictions. When an insured person receives healthcare services, these plans compensate them based on a predetermined fee for each service received rather than paying providers directly. This setup enables flexibility, meaning individuals can seek care from any qualified provider and the plan reimburses them according to the agreed-upon payment structure.

Each service rendered is paid a set amount directly to the insured, who may then be responsible for any additional costs exceeding that amount. This contrasts with managed care plans, which often limit provider options and may require referrals for specialist visits. The structure of indemnity plans prioritizes patient choice and autonomy, making them distinct within the broader range of healthcare insurance options.