Fee For Service (FFS) Insurance: The Pros and Cons
Written by: Aaron Garcia
FFS is one of the most expensive forms of insurance with high out-of-pocket costs. You’ll also need to file claims with your insurance company to get reimbursed.
FFS beneficiaries can see any doctor they want and don’t need referrals from a primary care physician.
If you have a Fee For Service health insurance plan, you pay a flat fee for any services you receive. You then file a claim to your insurance company for reimbursement. Since FFS customers typically pay upfront, they can visit any doctor or hospital with limited hassle.
While FFS plans are not nearly as popular as they used to be, they are still available. If you’re shopping for health insurance or helping a loved one with their options, here’s what you can expect from an FFS plan.
Find a local Medicare plan that fits your needs
FFS customers don’t have provider networks and typically enjoy the freedom to see any doctor they want. This can be a massive advantage if you spend a lot of time traveling. You also won’t need to see a primary care physician or need referrals to see specialists. Plus, many providers will even negotiate pricing with customers who have FFS plans to help them control out-of-pocket costs.
- No provider networks: see any doctor you want, anywhere
- No referrals or pre-approvals: just make an appointment and go
- May negotiate rates: Some doctors will lower their prices for FFS customers
Just a few years ago, more people were enrolled in an FFS plan than any other type. Now, it’s just the fifth most-popular type of health insurance policy. The main reason for this is because health insurance began shifting its focus to value-based care. Under FFS plans, if you get sick or injured, you pay the doctor to treat you. That approach leaves out preventable diseases or injuries. FFS plans don’t offer the same kind of personal, managed care that other plans provide. While you can still receive preventive services and other essential health benefits with an FFS plan, keeping up with them is up to you.
FFS also became known for its charges. Critics say that an FFS approach causes doctors to force their patients into unnecessary services and treatments to line their pockets.
- Costly: FFS plans have high out-of-pocket costs
- Less managed care: No primary care physician to remind or monitor you
- Upfront costs: pay your doctor directly, file a claim, then get reimbursed
Are you eligible for cost-saving Medicare subsidies?
You can shop all the plans available in your area by going to federal or state health insurance marketplaces, or exchanges.
As with all insurance decisions, this is personal. However, if you travel extensively and aren’t home long enough to see a managed-care provider, an FFS may make sense.
A fee is an agreed-upon price for any service you receive from a doctor. If you go to the doctor’s office, any care you receive will have a fee attached.
If your doctor charges $100 for office visits, you’ll pay $100 upfront when you go in, and send the claim to your insurance company. In this case, you were charged $100 (your fee) for the care you received (the service).