 Health insurance coverage can be classified into two main categories:
– Indemnity plans
– Manage care plans
Indemnity plans
An indemnity plan reimburses you for your medical expenses, regardless of who provides the service. In some situations/types of coverage, this amount may be limited. The coverage provided by most insurers is in the form of an indemnity plan. Various plans use various methods for determining how much you will be reimbursed for your medical expenses. Some common methods of reimbursement are the following:
Reimbursement – percentage of actual charges
Under this plan, the insurer pays a percentage of the actual charges for covered procedures and services, regardless of how much they cost. A common reimbursement percentage is 80%. This has the same effect as a 20% co-payment.
Reimbursement – actual charges
Under this type of plan, the insurer will reimburse you for the actual cost of fixed procedures or services, regardless of how much that cost may be.
Indemnity
Under this type of plan, the insurer pays a fixed amount per day for a specified maximum number of days. Your reimbursement will never exceed your expenses, although your reimbursement amount does not depend on the actual cost of your care.
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