How Does Fixed Indemnity Insurance Work?
Health ProtectorGuard, underwritten by Golden Rule Insurance Company, is a fixed indemnity insurance product.1 This type of insurance works differently than other insurance you might be used to that involves your health care.
You are probably in the habit of paying a share of the total covered costs. And that’s after you meet a deductible that you yourself are responsible for covering before your insurance company pays anything.
If you have hospital and doctor fixed indemnity insurance, you are paid a set benefit per hospital or doctor service as specified in the plan. No deductible or cost sharing first. You get a specific medical service, and you are then paid the eligible fixed benefit for that service.
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How does that actually work in practice? A couple examples can illustrate the benefits of adding a fixed indemnity plan to your insurance coverage.
A visit to a doctor
You have a Health ProtectorGuard Choice Plus fixed indemnity plan, in addition to your health insurance plan.2 One day, you decide to go to your doctor after trying to endure a sore throat and headache that just won’t go away.
Your Health ProtectorGuard Choice Plus benefit for a doctor office visit is $100 per visit. You would be paid $100 for one visit after submitting this expense.
After checking your throat and neck, your doctor indicates she wants to test for strep throat. She swabs your throat and sends the swab to a lab for testing. The result comes back positive. You have strep.
Your Health ProtectorGuard Choice Plus benefit for an outpatient lab test like one for strep throat is $200 per test. You would be paid $200 for one test in this case.
Your doctor prescribes a generic antibiotic, which you fill at your pharmacy on the way home.
Your Health ProtectorGuard Choice Plus benefit for a generic prescription is $20, which is what you would be paid in this case.
So, after submitting your expenses, the total benefits you would receive from your Health ProtectorGuard Choice Plus plan in this example is $320.
The scenarios on this page are just examples of how a fixed indemnity plan might work for you. Health ProtectorGuard insurance plans can complement other insurance you have, but they have their own explanations of what services are covered and what services aren't.
The following link takes you to the product brochure, which has more details about coverage to help you decide if a plan will work for you.
You have a Health ProtectorGuard Premier Plus plan, in addition to your health insurance plan.2 One evening, you suddenly feel sharp stomach pain that won’t go away. After trying to bear the pain for a couple hours, you call a friend who then drives you to the closest hospital emergency room. An ER doctor examines you and orders an abdominal ultrasound.
Your Health ProtectorGuard Premier Plus benefit for an ER visit is $500 per day. The benefit for an ultrasound is $300 per test. Once you submit your expenses, you would be paid $500 for one ER visit and $300 for one ultrasound.
The ultrasound shows the doctor your appendix needs to come out. You’re immediately taken to surgery for a successful open appendectomy.
Your Health ProtectorGuard Premier Plus benefit for a surgeon is $5000 for this type of surgery. The benefit for an anesthesiologist is 30% of the surgeon benefit. So, for the services of the surgeon and the anesthesiologist, you would receive $6,500 in benefits.
Post-surgery, you incur a 1-day hospital stay. You are given a prescription for some pain medication before you leave, which you fill at your pharmacy on the way home.
Your Health ProtectorGuard Choice Plus benefit for a hospital stay is $5,000 per day. The generic prescription benefit is $20. For the hospital stay of one day and the generic pain medication prescribed, you would receive benefits totaling $5,020.
So, after submitting all your expenses, in this example the total benefits you would receive from a Health ProtectorGuard Premier Plus plan equal $12,320.
Health care costs vary, fixed indemnity insurance benefits don't
In the appendectomy example above, it’s important to remember that you would be paid $12,320 no matter what your total cost of care was. Fixed indemnity insurance pays that set amount specified in the plan.
According to the International Federation of Health Plans, in 2015 the average cost of an appendectomy in the United States was $15,930. But they also found that 25% of the time the same procedure might cost $9,332.3 That means:
- If your care for those hospital services came to $9,332, you would be paid $12,320 and get to keep the rest of the money to use however you choose
- If your costs were closer to the average of $15,930, you would be responsible for the rest. However, your fixed indemnity plan would still helped with thousands in out-of-pocket costs.
Can a fixed indemnity help cover what your major medical plan doesn't?
In some cases, it might. Those out-of-pocket health care costs you could be helping with a fixed indemnity plan can include your major medical insurance deductible. If you have a high-deductible health plan, the fixed benefits paid as the result of a hospital stay like the one described here are really designed to help cover costs your major health insurance plan doesn’t.
Those benefits would most likely meet your deductible and more. They might even help you reach your health plan’s maximum out-of-pocket costs for the year.
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1 THIS PLAN PROVIDES LIMITED BENEFITS. This is a supplement to health insurance and is not a substitute for the minimum essential coverage required by the Affordable Care Act (ACA). Lack of major medical coverage (or other minimum essential coverage) may result in an additional payment with your taxes. 2 Benefits and limitations vary by plan. Check brochure for details. 3 2015 Comparative Price Report Variation in Medical and Hospital Prices by Country. International Federation of Health Plans. Retrieved from http://www.ifhp.com/
No individual applying for health coverage through the individual Marketplace will be discouraged from applying for benefits, turned down for coverage, or charged more premium because of health status, medical condition, mental illness claims experience, medical history, genetic information or health disability. In addition, no individual will be denied coverage based on race, color, religion, national origin, sex, sexual orientation, marital status, personal appearance, political affiliation or source of income.
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Each company is a separate entity and is not responsible for another's financial or contractual obligations.
Administrative services are provided by United HealthCare Services, Inc. or their affiliates.
Products and services offered are underwritten by Golden Rule Insurance Company, Health Plan of Nevada, Inc., Oxford Health Insurance, Inc., UnitedHealthcare Life Insurance Company, UnitedHealthcare of the Mid-Atlantic, Inc., UnitedHealthcare of New York, Inc.
This policy is subject to various exclusions and limitations. For costs and complete details of the coverage, call (or write) your insurance agent or the company (whichever is applicable).