How Fee For Service (FFS) Health Plans Work

Fee For Service plans are the oldest kind of health insurance coverage. They’re also usually the most expensive.

Fee For Service plans are sometimes called “Indemnity Plans.” The plan “indemnifies” you from health expenses — which means it pays for those expenses. There are no “provider networks” or “tiers of coverage.” You see any doctor you choose, and your plan pays the bill.


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Sounds great, right? Unfortunately, this kind of coverage gets expensive very fast.

In the 1970s, the cost of health care was getting out of control. Health plans started creating networks and negotiating prices with health care providers, and the result was the managed care plans that make up most people’s coverage today — such as HMO plans and PPO plans.

Even though they aren’t as common these days, Fee For Service plans are still available. If you’re interested in finding one, here are a few things you should know.

Advantages of FFS Plans

Despite their increased cost, FFS plans do offer advantages over managed care plans.

  • No pre-approval for care. Some health insurance plans require you to get approval for medical care before they’ll cover it. In an FFS plan, you won’t need to get pre-approval from your physician or from your insurance company.

  • No provider networks. Most health plans have networks of doctors and hospitals, and may require you to use these networks. FFS plans don’t cover care from specific providers — they cover specific medical services. You can receive care any doctor you choose, and your FFS plan will cover it.

Disadvantages of FFS Plans

FFS plans have their drawbacks, too:

  • Limited coverage for routine care. Many FFS plans are geared toward paying expensive medical bills, not covering regular care. If you’re more concerned with having coverage for routine and preventive care, an FFS plan may not be a smart choice.

  • High premiums and deductibles. FFS plans are very flexible, but that flexibility comes at a price. FFS plans are among the most expensive plans on the market.

Explore Your Options

Not sure what kind of health insurance plan to choose? Get an instant online quote and explore your options. Compare rates and benefits before you decide on a plan. When you find one that works, you can even apply directly with some of the nation’s top insurance companies.

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