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Fee for Service Health Insurance

Fee for Service is a policy that health insurance companies employ to prevent people from taking advantage of their health insurance plan. By forcing patients to pay for each visit, it limits how often people visit their medical clinic. Years ago, there were problems with seniors in Florida where older people would constantly visit local health clinics even though it was not necessary, all because they were not required to pay any out of pocket expenses because everything was paid for under their health insurance coverage.

People are getting around this by buying regular health insurance with a fee for service policy as well as supplemental insurance which helps pick up the fees for each visit.

This 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 pay a monthly fee, called a premium.

A certain amount of money each year, known as the deductible, is paid for by you before the Insurance payments begin. In a typical plan, the deductible might be $250 for each person in your family, with a family deductible of $500 when at least two people in the family have reached the individual deductible. The deductible requirement applies each year of the policy. Also, not all health expenses you have count toward your deductible. Only those covered by the policy do. You need to check the Insurance policy to find out which ones are covered.

After you have paid your total deductible amount for the year, you share the bill with your health insurance company. For instance, you might pay 25 percent while the insurer pays 75 percent. Your portion is called "coInsurance".

To receive any payments for fee-for-service claims, you might have to fill out forms and send them to your insurer to review. Sometimes your doctor's office will do this task for you. You should keep receipts for drugs and other medical costs. It is your own responsiblity for keeping track of your medical expenses.

There are probably 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.

Most fee-for-service plans have a "cap" or a "ceiling", the most you will have to pay for any medical bills in any given calender year. You reach the cap when your out-of-pocket expenses (for your deductible and your coInsurance) total a certain amount. It may be as low as $1,000 or as high as $5,000. The Insurance company then pays the full amount in excess of the cap for the items your policy says it will cover. The cap does not include what you pay for your monthly premium.

Some services are limited or not covered at all. You might need to check on preventive health care coverage such as immunizations and well-child care for your children.

There are two kinds of fee-for-service coverage: basic and major medical. Basic protection pays toward the costs of staying in a hospital room and for hospital care while you are in the hospital. It covers some hospital services and supplies, such as x-rays and prescribed medicine. Health nasic 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.

Some health policies combine basic and major medical coverage into one single plan. This is sometimes called a "comprehensive plan." Check your health insurance policy to make sure you have both kinds of protection.

Related Links

Types of Health Insurance

Fee for Service

HMO Information

Life Insurance

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