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.
Who’s Eligible for Fixed Indemnity Plans?
Anyone is eligible for a fixed indemnity plan, and you can cancel your policy whenever you want.
Do These Plans Cover Essential Health Benefits?
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.
What’s Covered Under Fixed Indemnity Health Insurance?
This varies with each plan. Each fixed indemnity plan covers certain medical services, and may cover some of the following:
- First Day Hospital Coverage: You receive a fixed cash benefit for the first day of a confined stay in a hospital;
- Daily Hospital Coverage: You receive a fixed cash benefit for each day in the hospital up to a certain number of days. (This does not include your first day). For example, if you end up in a hospital for 6 days, it may cover days 2 to 6;
- Intensive Care Unit (ICU) Coverage: You receive a fixed cash benefit for each day in the ICU depending on the number of days;
- Surgery: You receive a fixed cash benefit for any surgical operation;
- ER visit: You receive a fixed cash benefit for any trip to an emergency room;
- Ambulance: You receive a fixed cash benefit for any ride in an ambulance, including both ground and air ambulances; or
- X-rays: You receive a fixed cash benefit for a diagnostic x-ray or other laboratory imaging.
What Is a Fixed Cash Benefit and How Does It Work?
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.
How Much Money Is Included in a Cash Benefit?
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:
- $50: X-rays, preventative care;
- $100-200: Ambulance ride;
- $800 per day: daily hospital confinement; or
- $2000: surgery.
How Much Does Fixed Indemnity Health Insurance Cost?
- Premiums: Fixed indemnity health insurance typically come with low premiums. These premiums vary but are often as low as $25 per month. Since these plans are usually supplementing major medical plans, this cost is in addition to the monthly premium you, or your employer, already pay. Some plans may agree to accept lower premiums in exchange for fewer cash benefits.
- Deductibles: Most fixed indemnity plans carry no yearly deductible. You receive a cash benefit without having to pay towards the medical bill yourself.
- Coinsurance: There is no coinsurance for fixed indemnity health insurance.
- Copay: There is no copay required under a fixed indemnity plan.
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.
Are There Extra Costs for Going Out-of-Network?
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.
Are There Any Limits?
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.
Should You Get Fixed Indemnity Health Insurance?
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.
When Can You Enroll?
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.