Describe a traditional indemnity (fee-for-service) health plan and how reimbursement works.

• A. A traditional indemnity plan requires referrals for specialist visits and only pays in-network charges.
• B. A traditional indemnity plan allows providers to bill any network or non-network doctor; the insured pays the bill upfront and submits a claim for reimbursement per the plan's fee schedule or UCR, with optional deductible and coinsurance.
• C. A traditional indemnity plan is a type of HMO with gatekeeper.
• D. A traditional indemnity plan eliminates deductibles and coinsurance.

Answer: (B)

A traditional indemnity plan operates on a fee-for-service basis with open provider choice. You can visit any licensed doctor or hospital without a gatekeeper or referral. The provider or you pay the bill up front, and you file a claim with the insurer. Reimbursement is based on the plan’s allowed amount for the service, which is usually defined by a fee schedule or by a usual, customary, and reasonable (UCR) charge for that service in the area. After you meet any deductible, the plan pays a portion of that allowed amount, and you cover the remaining portion as coinsurance. If the provider charges more than the plan’s allowed amount, you may be balance-billed for the difference.