Indemnity Insurance

a.k.a. Fee-for-Service Insurance

Indemnity insurance is a type of health insurance plan that is very flexible. Instead of being restricted to a specific network (like HMO or PPO), you can usually go to any doctor or hospital you want. Indemnity insurance is the “old-school” type of health insurance where you pay first, then get reimbursed. It gives you the most flexibility but usually at the highest cost.

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How it works:

You pay a monthly premium.
When you get medical care, you pay the doctor or hospital directly.
Then you submit a claim to your insurance company.
The insurance company reimburses you for a set portion of the bill (usually a percentage, like 70–80%).

Key Features

Freedom of choice – You can see any doctor or specialist without referrals.
Reimbursement model – The insurer pays you back after you’ve paid for services.
Higher costs – Premiums and out-of-pocket expenses are usually higher than HMO/PPO plans.
Less common today – Most people now have managed care plans (HMO, PPO, etc.), but indemnity plans still exist, often as supplemental or specialized coverage.

Pros and Cons

Advantages:

Maximum freedom to choose doctors and hospitals.
No need for referrals.
Useful for people who travel a lot or live in areas with limited provider networks.

Disadvantages:

Higher monthly premiums.
You may have to pay upfront and wait for reimbursement.
Less preventive care coverage compared to modern managed plans.

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Maczko Insurance Solutions – your trusted ally for indemnity insurance

Schedule a free, no-obligation consultation with a local expert today. Together, we'll explore your risk landscape and craft a tailor-made indemnity solution built for resilience.

Indemnity Insurance