Ronnell Nolan founded Health Agents for America, Inc. in 2012, a non-profit trade association exclusively for health insurance agents. She has been in the insurance business as an agent for 37 years and lobbyist for 15 years.
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Fixed indemnity health insurance is supplemental health insurance that helps manage out-of-pocket costs. These plans provide an extra layer of protection in the event of serious injury or illness by paying you a set amount of cash benefits to cover specific medical expenses.
Anyone is eligible for a fixed indemnity plan, and you can cancel your policy whenever you want.
Fixed indemnity health insurance is not a major medical insurance plan and, therefore, doesn’t cover the 10 essential health benefits mandated by the Affordable Care Act (Obamacare). Fixed indemnity health insurance is often used to supplement or support your current Major Medical plan and help you lower your out-of-pocket costs.
This varies with each plan. Each fixed indemnity plan covers certain medical services, and may cover some of the following:
A fixed cash benefit payout is money provided to you by your fixed indemnity health policy that is used to pay directly for specific illnesses or injuries – you are literally given cash by your policy to pay for those medical expenses.
Unlike major medical insurance, fixed indemnity health insurance typically pays you directly in cash benefits, instead of paying your medical provider. A direct deposit allows you to use the benefits to cover whatever expenses you see fit. With most fixed indemnity plans, you do have the option to request that your benefits go directly to your physician or hospital.
The amount of money you receive in a cash benefit will vary depending on your plan and the medical service is covered. Benefits can be as low as $50 for lower-end services (like X-rays) and as much as $2,000 for things like surgery. These amounts will be predetermined in your plan.
Some average cash benefits you may receive with fixed indemnity health insurance include:
While fixed indemnity health insurance is fairly cheap, it’s important to remember that they’re often used as supplemental insurance to an existing major medical plan that you already have.
Under a fixed indemnity plan, you’re not limited by a network. There are no extra costs for going out-of-network with fixed indemnity health insurance. That makes this type of plan a great option if you’d like to keep your doctor or go to a specialist that isn’t in-network under your regular insurance plan.
With fixed indemnity health insurance you should expect limits, such as a limit on the number of days covered for a specific medical expense (example: a limit of 4 hospital visits or a limit of a 5-day hospital stay) or a limit on lifetime benefits. Since these plans are fixed, these limits should be clear and predetermined when you enroll in your plan.
Managing out-of-pocket costs is one of the most challenging aspects of affording health insurance. With high deductibles, coinsurance, and copays, even low-premium plans can be difficult to afford. If you’re finding these costs difficult, then fixed indemnity health insurance is worth considering.
These plans are flexible, easy and affordable. They offer extra protection for both planned and unplanned medical expenses. It can also be appealing to receive cash benefits directly instead of your benefits going directly to your medical provider.
However, fixed indemnity health insurance is far from comprehensive. While it can be used if you have no other insurance option, it’s not recommended as a replacement for Major Medical Insurance. Fixed indemnity health insurance doesn’t cover essential health benefits and won’t protect you from the Obamacare tax penalty.
Overall, fixed indemnity health insurance plans should not be used on their own but they can be very useful in covering out-of-pocket costs not covered by your regular insurance policy.
You can enroll for fixed indemnity health insurance at any time. Fixed indemnity health insurance is not subject to open enrollment dates.
You can always evaluate your health coverage and see if it’s the best option for your needs.
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