Fixed indemnity insurance plans — which pay a set amount when a policyholder is hospitalized or has another major medical event — are facing heightened scrutiny amid concerns that people who buy these policies mistakenly believe that they’re comprehensive health insurance.
The health insurance industry’s largest trade group, however, argues that fixed indemnity products play an important role in the marketplace and that newly proposed restrictions on those plans will have costly consequences.
“Every American deserves access to affordable, comprehensive, high-quality coverage and care. But the costs associated with getting sick or recovering from an injury continue to escalate year after year,” AHIP says in an Aug. 14 post on the group’s website. Fixed indemnity products address that problem by “helping cover out-of-pocket costs for specified services and other expenses during a time of serious illness, or following an injury,” the post states.