I have a inertherm heat pump model # c3da-030u-b. The thermastat has a red lcd light that should come on when the heat is on. When the heat kicks on sometimes it will blow really hot air out then a lot of the time it will blow cool but a little warm air out. Is my thermastat bad?

The question is. Is the heat pump keeping the temp in the house on what you have the thermostat set at? If so I would say its working the way it should. Average supply temp of a heat pump is around 98 degrees, it feels cool but its heating. When you feel the hot air at times it's the aux heat running with the heat pump. In short I would say your thermostat is fine.