Advantages / Disadvantages of Fee For Service (FFS) Plans

Posted in Fee-For-Service Plans , Health Insurance

July 20th, 2009

The world of medical insurance can be confusing to understand. The language includes terms like premiums, deductibles and co-payments. Having to decide exactly what type of health insurance option may benefit you can further complicate matters, and with so many options, it’s important to know all your choices before settling on one. One option is a fee for service plan, which also goes by the name of indemnity health insurance.

Fee for service plans are health insurance plans that allow their members the greatest degree of flexibility in their choices of medical providers including both doctors and hospitals. By opting into a plan of this type, a member can see whomever they chose as their primary health care provider and does not lock the member into a service network of providers.

Advantages of Fee for Service Plans

• The most flexible type of health insurance available to consumers
• Doctors can be seen wherever needed, including out of state for the insurance policy
• No waiting periods required for seeking the advice and consultation of a specialist

Disadvantages of Fee for Service Plans

• They have the most expensive premiums of all types of health insurance
• Deductible amounts must be met before co-payments kick in
• Insurance companies will not fully reimburse you for the cost of the services, and members are typically responsible for 20%-25% of their medical expenses
• Services must be paid for out of pocket by the member until they can be reimbursed
• Members are subject to completing their own claim forms and being responsible for all paperwork associated with their medical claims
• Little attention is provided to preventive medicine and care in fee for service plans

If you travel extensively, have a favorite doctor that you are committed to, or prefer flexibility, a fee for service plan may be for you.

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