Insurance Glossary

Insurance Term - Indemnity Health Plan

Indemnity health insurance plans are also called ‘fee-for-service’ plans. These are the types of health insurance plans that primarily existed before the rise of HMOs and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of healthcare services and the health plan pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the healthcare service providers and vary from one physician to another, one hospital to another, and one health insurance plan to another. Thus in short, it is a type of medical plan that reimburses the patient and/or provider as expenses are incurred.

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