If you have Atlas Direct insurance coverage and are visiting a healthcare provider who is unfamiliar with fixed-indemnity insurance policies, it may be useful to explain how these policies work compared to traditional major-medical health insurance plans.

Below are some of the key points.

How Fixed-Indemnity Policies Work

Definition and Nature:

  • Fixed-Indemnity Insurance: Fixed-indemnity policies pay a predetermined, fixed amount for specific covered events or medical services, regardless of the actual cost of the service. Benefits payments are made directly to the covered person, not to the healthcare provider.
  • Comparison with Major-Medical Insurance: Comprehensive major-medical health insurance plans will typically pay for a percentage of covered medical expenses after deductibles and copayments, and their claims payments are typically made to healthcare providers (rather than to covered persons) under an “assignment of benefits” arrangement.

Payment Structure:

  • Predetermined Benefits: Fixed-indemnity plans specify the exact amount payable for different types of medical events, such as daily rates for hospital confinement or specific amounts for covered surgical procedures
  • Independent of Actual Costs: The fixed benefit amount does not vary based on the actual charges incurred. For example, if the coverage documents specify $3,700 per day for a hospital confinement, the covered person will receive $3,700 per day regardless of the hospital’s actual charges.

Payment Process:

  • Benefits are Paid to Covered Person Only: Unlike major-medical insurance, which makes claims payments to healthcare providers, fixed-indemnity policies pay benefits directly to covered persons, who may be personally legally responsible for paying providers unless they also have coverage under other insurance plans, in which case those other plans may be responsible for some or all of the costs billed by providers.
  • Non-Assignable Benefits: The benefits paid by Atlas Direct’s insurance plan are not assignable to providers. This means that even though some fixed-indemnity policies allow for “assignments of benefits” to providers, Atlas Direct’s insurance plan does not. All of our benefits will be paid directly to covered persons. We will not direct them toward providers.
  • Personal Responsibility: The covered person may be responsible for all amounts charged by the provider unless they also have coverage under other insurance plans, in which case those other plans may be responsible for some or all of the costs billed by the provider.

Use of Benefits:

  • Flexible Use: The covered person can use their benefit payments for any purpose, including covering out-of-pocket medical expenses, paying bills, or other financial needs. Their use of benefit money is not restricted to paying for medical expenses.

Coverage Scope:

  • Limited Coverage: Atlas Direct’s insurance plan is a limited-benefits fixed-indemnity insurance product that does not offer comprehensive major-medical coverage.

Key Points for Providers

Policy Type:

  • Inform the provider that your Atlas Direct insurance coverage derives from a fixed-indemnity insurance policy, not a comprehensive major-medical health plan.
  • Emphasize that your Atlas Direct insurance plan pays set amounts for specific covered services directly to you, the covered person.  

Billing and Payments:

  • Clarify that the provider cannot and will not receive payments from your Atlas Direct plan. Instead, it will be you (as the covered person) that will receive any and all insurance benefits paid out by your Atlas Direct plan.
  • You may also want to clarify that it may be you who may be solely responsible for paying the provider unless you also have coverage under other insurance plans, in which case those other plans may be responsible for some or all of the costs billed by the provider.

Coordination of Benefits:

  • Explain that Atlas Direct’s insurance plan does not coordinate its payment amounts with the payment amounts that will be paid by other insurance plans under which you might have coverage.
  • As a fixed-indemnity plan, the benefits paid by Atlas Direct’s insurance coverage are fixed in advanced and will not vary based on what other insurance plans may or may not be paying for the same medical services or events.

Eligibility for Discounts:

  • If you will be paying out-of-pocket, you may be eligible for any self-pay, cash-pay, or no-insurance discounts the provider offers.
  • Discussing your payment arrangement with the provider may help to determine your eligibility for such discounts.

Conclusion

By understanding these points, healthcare providers can better appreciate fixed-indemnity insurance policies and how they differ from traditional major-medical health insurance plans. This knowledge may help to ensure smoother interactions between you and providers.