They have been around as the oldest health insurance plans but are among the most expensive ones as well. The Fee-For-Service (FFS) plans, also known as ‘Indemnity Plans’ for ‘indemnifying’, i.e. protecting or covering against health costs, are nonetheless still popular with some demographics due to their unique selling points (USPs) and simplicity.

With these plans you are not constricted to some specified provider networks or tiers of coverage and hence are free to visit your choice of doctor or institution. This can be a great advantage as far as price is no bar for you because the more options you choose on this plan, the expensive it gets. This is the reason why, when health care costs began to escalate in the late 1970s, many a people dropped their fee-for-service plans and chose ‘managed care plans’. Managed care plans were a direct result of the escalating health care prices because when prices soared, health insurance providers began to create networks and started to negotiate prices with the health care providers. Health Maintenance Organization (HMO) plans and Preferred Provider Organizations (PPO) plans are examples of these.
The advantages of Fee-For-Service Plans

• Does not need pre-approval care: Unlike some of the other health insurance covers that require the to-be-insured to get approval for medical care, with FFS plans, you do not have to get pre-approval from a physician or the insurance company.
• Does not put you in provider networks: In order to reduce cost, health insurance providers of other plan have tie-ups with specific network of doctors and hospitals and may need you to go to only these when you need medical care. With FFS plans you don’t need to adhere to some networks as you are free to choose your medical services provider.

Like other plans though, FFS plans are not without drawbacks too. Most of the FFS plans are designed or geared towards covering bulky or expensive medical bills. If you or the person to be insured is more concerned about preventive or routine care, then choosing an FFS plan may not be in your best interest. Also, the very probable drawback of these plans is that though they provide the flexibility, it comes at higher price.
Then again, not everyone’s needs are same and everyone needs to do proper research before selecting any kind of health insurance plan. If there is a probability that you might run long medical bills in the future, then fee-for-service plans might be the best ones for you.