Under a traditional indemnity (fee-for-service) medical expense policy, the insured:

Why A is correct

A traditional indemnity, or fee-for-service, policy imposes no provider network: the insured may see any physician or hospital, and the insurer reimburses a stated percentage of the covered charge — commonly 80% after the deductible is met — leaving the insured to pay the remainder. There is no primary care gatekeeper and no requirement to use contracting providers. Network restrictions, referrals, and negotiated rates are the tools of managed care plans, not of the original indemnity model. This is the original health insurance model.

Why the other options are wrong

• B) Restricting care to a contracting network is the defining feature of managed care (HMO/PPO/EPO), not of an indemnity policy. The indemnity model predates the managed care system of networks and contracts.
• C) Requiring a gatekeeper referral describes an HMO or POS plan; indemnity coverage lets the insured choose any specialist directly. No referral is ever required under the indemnity fee-for-service model.
• D) Indemnity policies use a deductible plus coinsurance on covered charges; flat office-visit copays are a managed care cost-sharing device. Flat office-visit copays are a managed care cost-sharing device, not indemnity.

Memory hook

Indemnity = freedom to choose any doctor, reimbursed for a share of the bill. Managed care trades freedom for control.