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Sometimes, just as you are getting a grasp on major medical plan lingo and how the coverage works, you come across yet another health insurance term you don’t quite understand. Let’s say, for instance, fixed-indemnity plan.
It can be easy to dismiss such coverage as unnecessary because, to be perfectly honest, trying to understand it makes your head hurt. However, a fixed-indemnity plan could be something that helps you save money on out-of-pocket healthcare costs this year, so we’d like to help you make sense of it.
Let’s start by looking at the core definitions. You already know that in this context, a plan is a group of specified health benefits. As for the terms fixed and indemnity:
Fixed = established; settled; set
Indemnity = protection or insurance against loss, damage, etc.
Put it all together and here’s a basic explanation:
A fixed-indemnity health plan pays set benefit amounts for covered healthcare services related to illness or injury, thereby providing some financial protection against unexpected medical expenses.
Fixed-indemnity plan benefits apply to a specific duration (e.g., number of days, weeks, visits) and the amount remains the same regardless of the actual cost of those services (e.g., $X per day, week, visit).
Fixed-indemnity plans are commonly referred to as hospital indemnity plans because they typically cover medical expenses resulting from hospitalization, surgery, chemotherapy and radiation services.
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Sue is admitted to the hospital with pneumonia and stay for three days – the condition is not pre-existing. She has a fixed-indemnity plan with a $0 per injury or illness deductible.
Here is how her plan benefits might look on paper – keep in mind, this is only for Sue’s fixed-indemnity plan, not her major medical plan:
|Sue’s covered benefits||Amount|
|Daily inpatient hospital confined benefit||$6,000 ($2,000 per day x 3 days)|
|Doctor visits while hospital confined benefit||$150 ($50 per day x 3 days)|
|Benefits payable before per injury or illness deductible||$6,150|
|Less per injury or illness deductible||$0|
|Total benefits paid||$6,150|
This is only an example and actual benefits will vary by plan and circumstances.
It is important to understand that fixed-indemnity plans are standalone policies that do not coordinate with your other health insurance coverage. Fixed-indemnity or hospital indemnity plans are not the same as major medical insurance and do not replace major medical insurance (aka, Obamacare plans), which means they are not subject to the Affordable Care Act. Unlike major medical insurance, they:
However, fixed-indemnity plans do:
If you are looking for extra financial protection against unexpected, high-cost healthcare, then a fixed-indemnity plan may be worth adding to your household’s annual benefits.
How much will it cost?
Talk with a licensed producer from healthedeals.com and get a quote!
 Webster’s New World College Dictionary. “Fixed.” Accessed January 17, 2016.
 Webster’s New World College Dictionary. “Indemnity.” Accessed January 17, 2016.
 The benefit examples shown are intended for illustrative purposes only. These examples do not contemplate the provider’s actual charges for services rendered nor the full extent of the covered person’s out-of-pocket costs.
HOSPITAL FIXED INDEMNITY
This is not qualifying health coverage (“Minimum Essential Coverage”) that satisfies the health coverage requirement of the Affordable Care Act. If you don't have Minimum Essential Coverage, you may owe an additional payment with your taxes.
About The IHC Group
Independence Holding Company (NYSE: IHC) is a holding company that is principally engaged in underwriting, administering and/or distributing group and individual disability, specialty and supplemental health, pet, and life insurance through its subsidiaries since 1980. The IHC Group owns three insurance companies (Standard Security Life Insurance Company of New York, Madison National Life Insurance Company, Inc. and Independence American Insurance Company) and IHC Specialty Benefits, Inc., which is a technology-driven insurance sales and marketing company that creates value for insurance producers, carriers and consumers (both individuals and small businesses) through a suite of proprietary tools and products (including ACA plans and small group medical stop-loss). All products are placed with highly rated carriers.
IHC Specialty Benefits, Inc.
IHC Specialty Benefits, Inc., doing business as Health eDeals Insurance Solutions is a full-service marketing and distribution company that focuses on small employer, individual and consumer products. Health eDeals markets products via general agents online, telebrokerage, advisor centers, private label and directly to consumers. For more information about Health eDeals visit http://www.HealtheDeals.com.