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🏥 '''Indemnity plan''' is a type of [[Definition:Health insurance | health insurance]] arrangement — sometimes called a fee-for-service plan — that reimburses the [[Definition:Policyholder | policyholder]] or healthcare provider for covered medical expenses without restricting the insured to a predefined network of physicians or hospitals. In the insurance landscape, it stands in contrast to [[Definition:Managed care plan | managed care]] models such as [[Definition:Health maintenance organization (HMO) | HMOs]] and [[Definition:Preferred provider organization (PPO) | PPOs]], which negotiate discounted rates with specific provider networks in exchange for steering patient volume.

⚙️ Under an indemnity plan, the insured receives care from any licensed provider, submits a claim, and the [[Definition:Insurance carrier | carrier]] pays a portion of the charges — typically after the insured satisfies a [[Definition:Deductible | deductible]] and subject to a [[Definition:Coinsurance | coinsurance]] split (often 80/20). Because there are no network discounts built in, the plan uses [[Definition:Usual, customary, and reasonable (UCR) | usual, customary, and reasonable]] fee schedules to determine the maximum reimbursable amount; charges exceeding that benchmark become the insured's responsibility. [[Definition:Claims processing | Claims processing]] for indemnity plans tends to be more administratively intensive, as each service must be evaluated against the fee schedule rather than flowing through pre-negotiated contract rates.

🌐 Although managed care has dominated the U.S. group health market for decades, indemnity plans retain a meaningful niche — particularly among high-income individuals, expatriate populations, and employers seeking maximum provider flexibility for executives. From an [[Definition:Insurtech | insurtech]] perspective, modernizing the indemnity model through real-time [[Definition:Claims adjudication | claims adjudication]] and digital reimbursement platforms is an active area of innovation. Carriers offering indemnity plans must carefully manage [[Definition:Adverse selection | adverse selection]], since policyholders who anticipate higher medical utilization are naturally drawn to the freedom these plans provide, which can push [[Definition:Loss ratio (L/R) | loss ratios]] upward if the risk pool is not priced or underwritten with sufficient rigor.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Health insurance]]
* [[Definition:Managed care plan]]
* [[Definition:Coinsurance]]
* [[Definition:Usual, customary, and reasonable (UCR)]]
* [[Definition:Preferred provider organization (PPO)]]
* [[Definition:Adverse selection]]
{{Div col end}}

Definition:Indemnity plan - Revision history

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