Fixed cash benefits
Fixed indemnity insurance
The short answer
Fixed indemnity insurance pays a set dollar amount for a covered event, such as a day in the hospital or a doctor visit, whatever the care costs. CMS says it is not a substitute for comprehensive coverage. The cash is yours to spend as you wish, but it does not pay your medical bills the way an ACA plan does.
Fixed indemnity insurance is not health insurance. It is a supplement and does not replace comprehensive coverage or count as minimum essential coverage.
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Updated and reviewed by the licensed agents at Health Insurance Solutions in Orlando, Florida. How we research and review
Fixed Indemnity at a glance
- How it pays
- Set cash amounts
- For example $100 a day in the hospital or $50 a doctor visit, whatever the bill says.
- Who gets the money
- You
- You can use it for medical bills, rent, the mortgage or anything else.
- Counts as major medical
- No
- It is not minimum essential coverage and does not replace an ACA plan.
- Health history
- Can matter
- The U.S. Government Accountability Office found plans that could deny applicants and had 12 month waits for pre-existing conditions.
Who is fixed indemnity insurance for?
A fixed indemnity plan pays a set dollar amount when you have a covered service, such as a doctor visit, a test or a day in the hospital, no matter what the bill comes to. It is not major medical insurance and doesn't replace an ACA plan. If a Marketplace plan would serve you better, we'll say so.
- People who missed open enrollment and need help with medical costs now
- Those who don't qualify for Marketplace savings and want a lower-cost option
- Anyone who wants cash benefits on top of a short-term or high-deductible plan
What does fixed indemnity insurance cover?
Usually included
- A set cash amount for each covered hospital day, doctor visit, test or other service in your policy
- Cash paid to you, to use as you wish, on top of any other insurance you have
- Benefits that do not depend on what the bill comes to or what other coverage pays
Usually not included
- Your medical bills. If a bill is larger than the benefit, you pay the rest
- Pre-existing conditions. GAO found two plans with 12 month waiting periods for them
- Minimum essential coverage. It does not meet the ACA's coverage standard
- Limits are possible. GAO found one plan with both an annual and a lifetime benefit limit
How much does fixed indemnity insurance cost?
Premiums are often lower than for comprehensive coverage because the benefits are limited. The price depends on the benefit amounts you choose, your age, your ZIP code and your state's rules.
Compare the benefit to a real bill
A plan that pays $100 a day in the hospital pays that whether the day costs $100 or $5,000. Ask what a typical stay would cost you after the plan pays.
No tax credit
Premium tax credits apply to marketplace plans, not to fixed indemnity plans.
Waiting periods and limits
Ask for the waiting period for pre-existing conditions and for any yearly or lifetime limit before you apply.
Check the seller
States regulate these plans. Make sure the seller is licensed where you live.
2027 health insurance subsidy calculator
Enter your state, household size and income to see your 2027 expected premium, your savings and whether Medicaid may apply.Health plan cost calculator
See what you would pay out of pocket for a medical bill under a plan's deductible and coinsurance.How is fixed indemnity insurance different from an ACA plan?
The GAO reviewed two fixed indemnity plans in 2023. Its findings describe those two plans, not every plan on the market, so read the terms of any plan you are offered.
| Question | Fixed indemnity plan | ACA plan |
|---|---|---|
| How does it pay? | A set cash amount for each covered day, visit or service, whatever the bill | Pays or limits what you owe for covered care under the plan's deductible, copayments and coinsurance |
| Can it deny you for your health history? | GAO says documentation for both plans it reviewed said they may deny applicants based on health history | ACA plans must cover preexisting conditions, according to GAO |
| Is there a waiting period for preexisting conditions? | Both plans GAO reviewed had 12 month waiting periods | ACA plans cannot impose waiting periods for benefits related to preexisting conditions |
| Are there dollar limits? | GAO found one plan with both an annual and a lifetime benefit limit | ACA plans cannot set annual or lifetime dollar limits on essential health benefits |
| Is it minimum essential coverage? | A disclosure GAO reviewed said the plan is not a substitute for minimum essential coverage | Marketplace plans are minimum essential coverage, according to HealthCare.gov |
When is fixed indemnity insurance not the right choice?
- It would be your only coverage. A large hospital bill can be many times the benefit.
- You need a plan that covers pre-existing conditions. A marketplace plan must, and these plans may not.
- You qualify for a special enrollment period or it is open enrollment. A marketplace plan protects you better and may come with a tax credit.
How do we help you decide on fixed indemnity coverage?
Check your other options
We look first at whether a Marketplace plan or a Special Enrollment Period would protect you better.
Know what it pays
We go through the amount it pays for each visit, test and hospital day before you apply.
Know the limits
We explain the benefit caps and what isn't covered, so a big bill doesn't catch you off guard.
Get help
What's your ZIP code?
Plans and prices depend on where you live.
Common questions
What is fixed indemnity insurance?
A fixed indemnity plan pays a set amount each time a covered event happens, for example $100 for each day in the hospital or $50 for each doctor visit. The payment does not depend on the size of your bill. Federal rules use those same examples.
Is fixed indemnity insurance health insurance?
Not comprehensive health insurance. CMS says hospital and other fixed indemnity insurance has traditionally been used as income replacement and is not a substitute for comprehensive coverage.
Does fixed indemnity insurance cover pre-existing conditions?
Often not right away. The GAO found that both plans it reviewed may deny applicants based on health history and had 12 month waiting periods for pre-existing conditions. ACA plans cannot do either. Ask for the exact terms of any plan.
Can I have fixed indemnity insurance and a health plan at the same time?
Yes. These plans are built to pay a set amount whatever other coverage pays, so many people use them as extra cash alongside another plan. They do not replace that plan.
What should I ask before I buy a fixed indemnity plan?
Ask how much it pays for each type of event, how long the waiting period is for pre-existing conditions, whether there are yearly or lifetime limits, what is excluded, and whether the seller is licensed in your state.
Does fixed indemnity insurance count as minimum essential coverage?
No. A disclosure the GAO reviewed said the plan is not a substitute for minimum essential coverage. The federal penalty for not having it no longer applies, but a large bill can still be your responsibility.
Guides that go deeper
Talk to a licensed agent
We compare plans, explain the tradeoffs and help you enroll. It costs you nothing.
Sources
Rules change. Confirm dates, limits and eligibility with the source, your state insurance department or a licensed agent before you decide. We last checked these on .
- CMS: Short term limited duration insurance and independent noncoordinated excepted benefits coverage(opens in a new tab)
- eCFR: 45 CFR 148.220, Excepted benefits(opens in a new tab)
- U.S. Government Accountability Office: Private health coverage, Farm Bureau plans, health care sharing ministries and fixed indemnity plans (July 2023)(opens in a new tab)
- HealthCare.gov: Minimum essential coverage(opens in a new tab)