Fee For Service Plans Explained

These days, you have plenty of healthcare options. It can be hard to keep track of all the different plans — not to mention all the terminology. Fee For Service (FFS) coverage has a confusing modern name. But it’s actually traditional health insurance — the same health coverage your grandparents had.

Among all the plans available today, Fee For Service coverage gives you the greatest choice of doctors, surgeons, hospitals or clinics. You won’t have to wait for treatment in a medical emergency or unexpected illness. No referrals or pre-approvals needed. It helps you avoid a lot of the complaints people have about managed care plans like HMOs and PPOs.

Sounds great, right?

The downside is that this kind of coverage can be very costly. Fee For Service plans generally have high premiums and deductibles. And you’re almost always responsible for a significant coinsurance percentage of your medical bills.

What Should I Be Aware Of?

Fee For Service coverage is more expensive than an average managed care plan, but it is also more versatile. That’s not to say that it won’t have restrictions.

For example: Your Fee For Service plan may not offer coverage for preventive care. So check-ups, routine office visits, and vaccinations could end up being paid for entirely out of your own pocket. This can make Fee For Service plans impractical for large families that require regular doctor visits and preventive health services.

Is A Fee For Service Plan Right for Me? Here’s What You Should Consider

Once you pay your annual deductible, you’ll share your medical bills with your insurance carrier (your portion is called coinsurance). You might pay 20% to 30% of your bills while your insurer pays 80% to 70%. It’s important to know what your coinsurance rate will be before selecting a plan.

Most Fee For Service plans have “caps” that define the limits of what you pay for healthcare each year. Your cap may be as low as $1,000 or as high as $5,000 — and that figure won’t include your monthly premium. You should know exactly what that number is before you commit.

A Fee For Service plan can offer you comprehensive and immediate care in a crisis. They're also great for avoiding the bureaucratic roadblocks or waiting periods that sometimes go with managed care plans. But remember: they're not very economical for large families or people just needing coverage for regular checkups.

If you’d like to explore Fee For Service plans in detail, compare plans from several health insurance agents. Our free insurance quote service will match you with up to 5 local agents.