An indemnity plan typically is one that pays a specific fee per service. Historically they have not been bad per se...as long as the consumer understands that in many cases most of the financial liability stays with them not the "insurance company".
Today many plans like this are aggressively marketed as low cost health insurance insurance, when they are neither low cost or actually insurance.
You might see the phrase accepted at ANY hospital...that is the bait. The actual benefit might be something like $500 per ER visit and $300 per night in a hospital. The doctors services are paid on a rate scale that can leave huge claims as the responsibility of the consumer.
Generally they are marketed as "group insurance", that is because they make you join an association to qualify. They will say that there are no pre-existing condition exclusions or waiting periods and that is generally true.
Generally there is a separate deductible for each covered individual for each covered service.
The plans are what they are and they do have their place. Sometimes the legit indemnity plans are called mini-med plans. Often though the sales people represent the plans as if they where comprehensive major medical plans like those offered by say Blue Cross Blue Shield, Humana or United Healthcare.
There is a ton of info on the wen about what to look out for.
A while back a trader recommended checking out the Free Lancers Union for health insurance. It maybe for New Yorkers only. But it appears, according to their latest blog post, they are eventually going to offer CO-OP insurance services in a few states: NY, NJ, OR.
It might also be worth mentioning there may be more CO-OPs opening in other states in the near future thanks to the health care reform law.
Last edited by MrYou; March 17th, 2012 at 11:10 PM.