Hassle-Free Health Coverage: Indemnity Plan

With an indemnity plan, you can use any doctor or hospital you wish. You or they send the bill to your insurance company, which pays part of it. Under most plans, you have to pay a deductible before your insurance company will pay.

Once you meet the deductible, most fee-for-service plans pay a percentage of the usual, customary and reasonable charge (UCR) for a service.

Your insurance company usually pays 80 percent of the cost and you pay the copayment (co-insurance), or the other 20 percent.

If a doctor charges more than the company's UCR rate, you will have to pay the difference.

An indemnity plan typically pays for things like medical tests and prescriptions as well as charges from doctors and hospitals. But, it usually won't pay for preventive care, like annual checkups.