Which feature is characteristic of a traditional indemnity (fee-for-service) medical expense plan?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Traditional indemnity, or fee-for-service, medical expense insurance gives the insured complete freedom of provider choice. The policyholder selects any physician or hospital, receives the care, and the insurer reimburses a stated percentage of covered charges (typically after a deductible, subject to coinsurance and a maximum). There is no provider network, no gatekeeper, and no utilization management requirement to obtain a referral. This is the classic contrast to managed care plans such as HMOs and PPOs, which build networks and controlled access into the delivery system, and it is a core individual medical plan-type distinction in the A&H outline.
Why the other options are wrong
- B) Restricting care to a contracted network is a managed care feature; indemnity plans have no network.
- C) Requiring a primary care gatekeeper for referrals describes an HMO or POS model, not indemnity.
- D) Indemnity plans cover outpatient and physician services too; confinement indemnity is a separate limited product.
Memory hook
Indemnity = any doctor you choose, no network, no gatekeeper, plan pays its share.