Fixed Indemnity health insurance plans work differently than major medical plans do by paying a fixed dollar amount per service rendered versus having a deductible and coinsurance then, having the insurance carrier pay 100% of covered hospital and medical charges like a major medical plan works. Rather than negotiating with the provider for a contracted amount per service or charge, these fixed indemnity plans will assign a fixed dollar amount for each and every charge you could incur so long as these charges are covered by the insurance carrier. This means you may owe more to the provider than what the plan covers. In this case, you could negotiate with the provider directly. Or, the amount covered under the plan may be more than what the provider charges. In which case you would receive the difference of what the insurance carrier paid versus what the provider charged!
These indemnity plans have emerged as a viable and affordable alternative to ACA plans. And, many of these carriers will integrate a PPO network structure. These PPO networks can work well to reduce the charges being billed as the providers can negotiate with the PPO network for a contracted rate, reducing what you owe. Here in Texas United Healthcare and New Era Life Insurance Company offer competitive fixed indemnity plans that utilize networks to offer discounted pricing at the provider level. United Healthcare utilizes the choice plus national network and New Era uses the (PHCS) Private Healthcare Systems PPO network. PHCS is one of the oldest and largest national PPO networks in the country with over 600,000 participating providers nationally. In light of the reduced PPO options for individual health insurance in Texas, these plans give consumers the ability to see a wider range of providers that do the more restrictive HMO networks. It is important to note, these fixed indemnity plans do not necessarily require you to see a provider within the network. The insurance carrier will pay the stated amount in the contract regardless of any provider you may see. So, if you were to see a provider not in one of these networks, you could still file the insurance claim directly with the insurance carrier and pay the provider of choice if that provider decides not to accept assignment of those benefits. This feature alone makes these plans very attractive to a wide range of families looking for quality, affordable access to providers.
There are a few areas of interest you should be aware of regarding these plans. Namely, in order to offer an affordable rate to consumers, the insurance carrier will typically build in a 12 month waiting period for pre-existing medical conditions. This means you must wait 12 months before the insurance carrier pays claims based upon conditions for which you have been treated(treatment also includes medications) in the last 12 month time period from the effective date of coverage. Also, there are limitations to the amount the policies will pay on an annual basis and most have lifetime payment restrictions so, it is conceivable you could be dropped from coverage if those lifetime maximums of up to 5 million dollars are exhausted.
Individuals who are looking for lower premiums coupled with larger provider networks and choices may want to closely consider a fixed indemnity product as the positive aspects of these plans may outway any drawbacks in terms of waiting periods or dollar limits. These plans are usually guaranteed renewable to age 65, which means you cannot be cancelled for any reason other than non payment of premium or exceeding the lifetime amount of coverage imposed by the plan. So, if you are currently in good health with no or limited amount of existing medical conditions the fixed indemnity model may be the right choice for you as they will allow you to get in at a good price and renew the coverage all the way to age 65. If you’d like a quote or want to have your questions answered by a licensed professional, please call: 866 341 8542. Or, you may certainly complete a contact form to have one of our agents call you when it is most convenient to discuss plans and pricing in more detail.