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Fee for Service Plans

Fee for Service Plans

A Fee for Service plan is the conventional type of medical insurance plan. Fee for Service plans are also known as Indemnity Insurance plan. With this kind of medical insurance the payment to the healthcare givers is made during the time of service.

Kinds of Fee for Service Policies

There are generally two types of Fee for Services plans;

  • Basic Medical Insurance - This type of insurance pays for the expenses of hospital care and hospital room; in case of hospital stay. It provides coverage for some services and products like x-rays and some prescription drugs. It also bears the cost of a surgery outside or inside of a hospital; if required.
  • Major Medical Insurance - This type of insurance plan starts providing coverage where Basic Insurance ends providing coverage. It covers expenditures of lengthy and expensive conditions as well as injuries.

Some of the plans are combination of both Major Medical Insurance and Basic Medical Insurance plans; these are known as Comprehensive Plans.

Expenses of Fee for Services Plans

A usual Fee for Service plan's expenses gets settled in the below mentioned process:

  • Specific amount of dollars per year, which is called deductible, is paid for the consumers prior to any of their indemnity payments start. In a standard plan, the amount of deductible may be 250 USD for every individual in a family and 500 USD for an entire family. Once the deducible is paid for the year, the rest of the medical bill is shared with the insurer; like, the consumer may have to pay 20%, when the insurer pays 80% for a definite healthcare expense.
  • Most of the Fee for Service policies has a “cap”; the maximum amount one has to pay for his or her healthcare bills per year. If the consumer's out-of-pocket expenditures meet a specific amount (deductible plus coinsurance), then it can be said that he or she has reached the cap. The insurance provider then pays the rest amount (excess of cap) in full.

Advantages of Fee for Service Plans

The key advantage of selecting Fee for Service plans is the flexibility provided. A customer normally can select any clinic or physician of his own. Or, the customers are provided with a complete list of clinic, physician or hospital that they can visit. Moreover, as in this procedure the customers are only once paid for an actual visit to a clinic or physician, there are no pre-decided regular payments to concern, other than the premium every month.

Disadvantages of Fee for Service Plans

The key disadvantage to use a Fee for Service plan is that there are often restrictions to what in fact gets coverage under the policy; as, preventive care (like immunizations) is most of the time goes uncovered. This can be sometime a severe issue to think about if somebody is planning to purchase coverage for their kids and him.

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