What type of health insurance plan reimburses the insured for the cost of covered medical care received?

The indemnity plan is designed to reimburse the insured for the costs of covered medical care they receive. This type of insurance allows policyholders to choose their healthcare providers without restrictions on network or referrals, providing them the flexibility to seek care from any hospital or doctor. When the insured incurs medical expenses, they pay for the services up front and subsequently submit a claim to the insurance company for reimbursement based on the terms of their policy. This reimbursement process can lead to more out-of-pocket expenses initially, but it gives members the ability to choose any provider.

In contrast, managed care plans, exclusive provider organization plans, and health maintenance organization plans typically operate on a network basis, where the insured is incentivized to use specific providers in exchange for lower copayments or less significant out-of-pocket costs. These plans often do not offer the same reimbursement structure as indemnity plans, focusing instead on coordinating care within established networks to control costs.