What is a key feature of indemnity health plans?

Indemnity health plans are characterized by their payment structure, where fees are paid for each service rendered. This model allows consumers to pay their healthcare providers directly at the time services are provided, and the insurance company subsequently reimburses the provider or the insured for the costs incurred. This approach offers flexibility, as policyholders can choose any healthcare provider without being limited to a specific network of providers, which is often the case in more managed care plans.

The other aspects of indemnity plans, such as not having restricted provider networks, are important to understand as they contrast with managed care models. The absence of capitation agreements means that providers are compensated based on the volume of services provided rather than a set fee per patient. Hence, the defining feature of an indemnity health plan is its fee-for-service structure, emphasizing the payment for each individual service rendered.