Fee for Service
With a Fee for Service plan, participants choose a doctor or other service provider, and the insurance pays for the majority of the cost. A Fee for Service plan generally offers the widest network of doctors and hospitals (compared to other types of plans, which limit access to some providers). Fee-for-service can involve two separate policies:
- Basic Coverage. Helps pay for normal daily health care, doctor visits, hospitalization and surgery
- Major Medical. Helps pay for costs incurred by a serious injury or chronic illness.
Health insurance costs have skyrocketed over the past couple of decades and Fee for Service plans became expensive for health insurance companies. They raised premiums which made these plans expensive for employers and employees as well. To deal with the problem of ever escalating healthcare costs, insurers developed the concept of “Managed Care.”