Health Insurance Articles

Three Reasons The Hold Harmless Provision Is Good To Have In Your Health Insurance Policy

2010-05-07

One of the most prevalent complaints about any of the details of any health insurance policy currently for sale in the United States is the fact that they are overly complicated. The amount of conditions, restrictions and omissions in even the most basic health insurance policy is staggering and confusing, as much of the contract is written in legal double-speak. Nonetheless, there are some provisions which should be present in every health insurance contract, and clients would do well to either find these clauses in their agreement, or ask an agent where they can be located. One of the most important parts of any health plan is the hold harmless provision. If you have a plan that does not contain this provision, you could be on the line for more money that you realize.

The function of the hold harmless provision is to prevent providers - in this case, doctors, specialists, or hospitals - for holding patients financially accountable if they do not get paid by the insurance company. This means that if a health insurance company goes bankrupt, a hold harmless clause in their agreement with physicians, which should be reflected in the contract they have with the patients, forbids the medical professionals from seeking compensation for their time or services from the patient themselves. Many medical practitioners do not care for this clause, as it could obviously cause issues to arise if they have spent a great deal of time with patients of a particular insurance plan which is pulled under in the economic downpour. While service providers do stand to lose money if the insurance company does not come through, the cost of treatments, especially drug or radiation therapy, is often so astronomical that to ask a client to pay for it would easily bankrupt them or force them into crushing debt.

This clause is therefore important to have in your policy for three reasons. First, it prevents a failure by your health care plan to pay from coming back and causing debt for you or your family. Second, it stops providers from padding bills with extra treatments, as non-payment cannot be recovered, and third, it removes the element of money in the patient-doctor relationship, which aids in making treatment about the disease and recovery itself, instead of about how much needs to be paid and when.

While this clause is becoming more prevalent in policies across the country, it is important to check with your insurance provider to make sure that the clause is included. Even a stable insurance company can fall victim to current or future economic instability and it pays to be prepared now, so you don't pay for it later.