What Are the Advantages & Disadvantages of FFS for the Payor?

There are many different kinds of medical insurance plans available. Some put more restrictions than others on where patients can obtain medical services and how long they have to wait for medical services, among other restrictions. FFS stands for “Fee for Service”, which is a type of medical insurance plan. FFS medical insurance plans are the most flexible type of plan from the customer’s perspective. Because of this flexibility, it’s also the most expensive type of plan.

Advantages

FFS medical insurance plans are attractive because they offer the greatest amount of flexibility. For example, unlike other medical insurance plans, FFS plan customers can see a doctor anywhere they want, including outside the state where the insurance was purchased. Unlike other medical insurance plans, there is no waiting period required before patients are allowed to seek advice from a specialist, such as a dermatologist.

Disadvantages

Due to the amount of flexibility associated with FFS medical insurance plans, they have the highest premiums compared to all other insurance plans. Customers must pay for their services out-of-pocket until they are reimbursed by the insurance company. Insurance companies typically don’t reimburse customers for the full cost of services, requiring customers to be responsible for between 20 and 25 percent of their medical expenses. FFS plans require their customers to complete all of their own paperwork associated with a claim.

Evaluation

FFS plans should be purchased by individuals and families who have a steady and reliable income that can meet the higher than usual premiums. Unfortunately, this rules out a large portion of the U.S. population. If you can afford it and require the flexibility, FFS may be the plan for you. FFS plans are particularly attractive to individuals who travel extensively or who have a favorite doctor that they want to be able to see even if they move.

Alternatives

FFS is just one type of medical insurance plan. Other medical insurance plans include Preferred Provider Organization (PPO) plans, Health Maintenance Organization (HMO) plans and Point of Service (POS) plans. Each of these plans have different requirements associated with where service can be obtained and whether or not a waiting period is required to see a specialist.