Health Insurance Mastery Practice Exam

Which of the following allows for immediate reimbursement of medical expenses incurred by the insured?

1. Health savings account

2. Regular health plan without deductibles

3. Indemnity plan

4. Preferred provider organization

The correct answer is: Indemnity plan

The indemnity plan is designed to allow for immediate reimbursement of medical expenses incurred by the insured. This type of health insurance provides the insured with greater flexibility in choosing healthcare providers and typically does not require referrals to see specialists. Under an indemnity plan, when the insured receives medical care, they can pay the provider directly and then submit a claim to the insurance company for reimbursement. This process can happen relatively quickly, depending on the insurer’s claims processing timeline. In contrast, other options like a health savings account (HSA) are savings tools that allow insured individuals to pay for qualified medical expenses using pre-tax dollars but do not provide immediate reimbursement. While a regular health plan without deductibles may cover expenses without requiring out-of-pocket costs upfront, reimbursement may still take time based on claim processing. A preferred provider organization (PPO) allows for a network of providers but usually involves co-pays and may require the insured to pay out-of-pocket expenses before filing for reimbursement, which is not as immediate as the indemnity model.