The Basics of Defined Benefit (Indemnity) Health Insurance
Defined Benefit (also called Indemnity) health coverage is typically characterized by low premiums and low deductibles. These plans typically cover each medical expense based upon a set schedule of benefits. Like major medical plans, they also give plan members PPO network discounts on all medical services.
If you have to go to the doctor, the plan with pay one dollar amount, if you have to have a day surgical procedure performed the plan will pay a specified amount for the procedure and include a fee for the surgeon, anesthesiologist and assistant surgeon. For overnight stays in the hospital, the plan pays a daily rate from (on average) between $2,000 and $6,000 per day. If you incur remainders over and above the amount the insurance company has paid for a medical service, you are responsible for paying that remainder.
Some specified benefit plans include deductibles, some do not, but in most cases, if there are deductibles, they can be taken from the lump-sum of benefits offered at the end of a hospital stay or surgical procedure.
The heartier specified benefit plans can often times offer more benefit than the majority of reasonably priced individual major medical plans on the market today, in that they can offer payment for diagnostic testing, ER visits, ambulance costs, and costs incurred due to mental and nervous disorders (for which there is very little coverage – if any – in the individual major medical market).
These plans are more reasonably priced than major medical plans, thus they can be paired with critical illness and accident policies for added income protection in the event that the insured suffers a catastrophic illness or injury.
Specified or defined benefit plans are not regulated by the federal government to the extent that major medical plans are, thus they can impose lifetime and annual benefit caps. If you are interested in this kind of plan, ask your broker what caps are in place and how they may affect you in the event of catastrophic illness or injury. Because these plans are not subject to governmental regulation like the affordable care act, premium increases can be controlled. These companies do not have to accept everyone, so even after January 2014, you will still have to medically qualify for them.
These health insurance plans are great Obamacre alternative plans due to the lower rates and deductibles. Many defined benefit carriers have rates up to 50% less than competing major medical plans.
At DFW Drect Insurance, we offer a wide variety of defined benfit health insurance policies to fit any budget. For more information on indemnity or defined benefit plans, call us toll free at 1-866-999-1215 or request a quote on our home page at www.dfwdirectinsurance.com.