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What Is Fee-For-Service Health Insurance?

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Fee-for-service is the traditional kind of health care policy. Insurance companies pay fees for the services provided to the insured people covered by the policy. This type of health insurance offers the most choices of doctors and hospitals. You can choose any doctor you wish and change doctors any time. You can go to any hospital in any part of the country. With fee-for-service, the insurer only pays for part of your doctor and hospital bills. You will have to pay a monthly fee, or premium, a yearly deductible that will have to be paid before the insurance payments begin, and after you have paid your deductible amount for the year, you share the bill will the insurance company, this is known as coinsurance.

To receive payment for fee-for-service claims, you may have to fill out forms and send them to your insurer. Sometimes your doctor's office and hospital will do this for you. You are responsible for keeping track of your medical expenses. There are limits as to how much an insurance company will pay for your claim if both you and your spouse file for it under two different group insurance plans. A coordination of benefit clause usually limits benefits under two plans to no more than 100 percent of the claim.

There are two kinds of fee-for-service coverage: basic and major medical. Basic protection pays toward the costs of a hospital room and care while you are in the hospital. It covers some hospital services and supplies, such as x-rays and prescribed medicine. Basic coverage also pays toward the cost of surgery, whether it is performed in or out of the hospital, and for some doctor visits. Major medical insurance takes over where your basic coverage leaves off. It covers the cost of long, high cost illnesses or injuries.

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