An acronym for Fee For Service health insurance, FFS insurance is the original health insurance coverage type. It’s also the most expensive type of health insurance coverage. Also known as “Indemnity Plans” these plans indemnify you from health expenses, simply put: they pay for the expenses.
Unlike the other types of plans there are no health care provider networks or different tiers of coverage, with these plans you see whatever doctor you like and your plan pays the bill. Done and done.
As of right now this is probably sounding ideal right? Well, all that glitters isn’t gold. This type of coverage gets expensive… Fast.
Here’s a little backstory, in the 1970′s health insurance costs were shooting to the moon, just out of control! So insurance companies started to create networks and negotiating costs with various health care practitioners. This resulted in, what we know as, managed care plans (i.e. HMOs and PPOs). While uncommon, Fee for service health insurance plans are still available if you’re still interested in getting one.
Now, even though they do cost more there are some benefits:
There’s no pre-approval, while some health insurance plans require you to be approved for medical care before they’ll cover it FFS plans do not.
You also won’t be required to use a network, that means you can use whatever doctor you choose regardless of their network AND your FFS plan WILL cover it!
But, just like there are advantages, there are also disadvantages:
Limited coverage for routine care, many Fee for service health insurance plans are geared towards high medical bills – not routine checkups / typical care. If you’re more concerned with having coverage for routine checkups and preventive care a FFS plan probably isn’t for you.
They’re expensive, remember that phrase “good, fast, cheap… pick two”? That definitely applies to FFS plans. While they offer remarkable flexibility, that flexibility comes at a price premium, they’re typically among the most expensive health insurance plans available.
