Most people love surprises – but when it comes to medical bills, not so much. Medical services often come with bills that are hard to understand and arrive weeks or months after you’ve received treatment.
Unexpected medical bills can be costly. That’s where hospital and doctor indemnity insurance comes in. This type of supplemental coverage – also called fixed indemnity insurance – pays you or your provider a set amount for some of the most common medical services you and your family might face.
On top of that, hospital and doctor insurance can provide added benefit, as long as you understand what it may be, says Caitlin Donovan. She’s the senior director of public relations for the nonprofit Patient Advocate Foundation (PAF).
“This is not health insurance, and it can be really catastrophic for people who buy it not realizing that,” says Donovan.
She recalls a PAF client whose employer offered both a traditional health plan and a fixed indemnity plan, implying that they were more or less the same thing. The client picked the fixed indemnity plan because the premiums (that is, monthly insurance costs) were cheaper – but then faced big bills after needing hospital treatment.
To avoid such mistakes – and to get the most out of your coverage – here are 6 things you need to know.
Interested in looking at a supplemental hospital and doctor plan? Learn more about your options here.
Instead, it helps fill the gaps between what healthcare services cost and what health insurance pays for.
What does that mean? Your plan will pay a fixed amount for each service it covers. For example, it might pay $80 for a doctor visit, $40 for a name-brand prescription medication, and $1,000 per day for inpatient hospital care. Your plan materials should include a detailed list of covered services and reimbursement amounts.
Your policy may refer to this perk by the term “first-dollar coverage.” You also aren’t responsible for copays (a fixed out-of-pocket cost for a service) or coinsurance (the percentage of a bill you must pay after meeting your deductible). Just keep in mind that you may still have deductibles and copays to cover with your primary health insurance policy.
Fixed indemnity plans don’t have to provide the coverage mandated under the Affordable Care Act (ACA), a government program that offers people health insurance, regardless of whether they have a preexisting condition like cancer. For example, it may not provide coverage for expenses resulting from preexisting conditions. So if you need treatment for a condition you had before signing up, you may not get any reimbursement from your hospital and doctor insurance. Regardless, it’s important to review the plan materials to see what is and isn’t covered.
Some hospital and doctor plans may offer discounts if you use an in-network provider. (That refers to the specific doctors in your area who accept your health insurance.) Also, you should be aware of your primary health plan’s network requirements, because out-of-network care can be much more expensive.
Unlike traditional health insurance, there are no open enrollment periods. To figure out whether hospital and doctor insurance might be right for you, review what your health insurance plan covers and what you can afford to pay out of pocket.
“I think people should carefully consider how they augment their traditional medical insurance plan with a supplemental plan,” Donovan says.
The federal No Surprises Act, which took effect on January 1, 2022, protects you from surprise medical bills when you receive emergency and non-emergency services from out-of-network providers at in-network facilities. Before the law was enacted, you might have to pay if, for example, an in-network surgeon at an in-network hospital used an out-of-network anesthesiologist (the doctor who puts you to sleep). Now you’ll just pay the in-network price.
If you’re uninsured or paying in cash, the law requires that you receive a good faith estimate of the cost right when you make an appointment or if you call and request it. If you get a bill later that’s more than $400 over that estimate, you can contest it through a new patient-provider dispute resolution process.
“I think it’s one of the most consequential bills for patients that’s come out in the last few years,” Donovan says. “It’s a really good bill.”
The No Surprises Act covers both group and individual health plans.
One of the last things you want are any health care coverage or insurance surprises. Help yourself prepare for the unexpected by taking some time to find an insurance plans to fit your needs.
Centers for Medicare & Medicaid Services. “No surprises: Understand your rights against surprise medical bills.” January 3, 2022. Retrieved from https://www.cms.gov/newsroom/fact-sheets/no-surprises-understand-your-rights-against-surprise-medical-bills
Centers for Medicare & Medicaid Services. “Resolving billing disagreements.” Retrieved from https://www.cms.gov/nosurprises/consumers/payment-disagreements Accessed February 25, 2022.