A fee-for-service plan is a traditional health insurance plan that allows the patient to choose any doctor or facility, and then makes the patient pay that provider directly. After the patient makes the payment, he or she then files a claim with the insurance company. These kinds of plans are normally more expensive that HMOs or PPOs, but they also permit the greatest freedom to choose providers.
The fee-for-service plan offers the same coverage everywhere in the country, and often internationally. The insured person can find a doctor or facility wherever there is a need.
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Advantages of a Fee-for-service Plan
- Permits the greatest freedom of choice for doctors, hospitals, and pharmacies
- Referrals are not necessary
- There is the greatest choice of specialists
- The deductible may be low
- The insured is covered in any locality
Disadvantages of a Fee-for-service Plan
- Payment for service may be up-front.
- All medical claims must be filed in order to be reimbursed. All receipts would need to be kept, with copies filed at the time claims are filed. Some providers will file for the patient, but this chore may need to be completed by the insured.
- You will still be required to pay co-insurance after you meet the deductible.
- This kind of plan costs more than other kinds.
- Preventive care may not be considered as a separate category.
Fee-for-service Plan Details
The basis of a Fee-for-Service plan is to permit the greatest freedom of choice while providing coverage above a pre-determined amount (your deductible). You need to have the resources to pay the deductible and co-insurance out of your own funds. Most plans cover 70 to 80 percent of the costs above the deductible.
Young, healthy people who rarely get sick would like this plan. Also, this sort of health insurance may be perfect for business people who travel a great deal and need coverage anywhere they are. It might be uneconomical for families with young children, who need frequent doctor visits and a higher level of preventive care. It is also not a good choice for someone who would find the extra paperwork difficult.
Different classes of these plans include basic coverage, major medical, and comprehensive plans (which include both basic and major medical coverage).
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