Fee-For-Service Health Plans Cover Everything - At a Price

Indemnity insurance, the traditional and more commonly familiar fee-for-service health care, has gradually become less prevalent as managed care becomes more and more popular. However, if you value flexibility in your health care and don't mind spending a little extra money for full coverage, it may be the best policy for you.


This page:

  Describes the coverage and cost of indemnity insurance

  Explains popular indemnity policies like major medical insurance

  Helps you decide if fee-for-service health care is for you

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Your coverage with fee-for-service health care

Fee-for-service health care offers you incredible flexibility concerning your choice of physician and facility, including your primary caregiver, any specialist that might be necessary, your hospital and even your surgeon. Having coverage this flexible also means immediate treatment for medical emergencies or unexpected illnesses.

Of course, as with anything, fee-for-service health plans do carry their own restrictions. They do not traditionally cover preventative medicine, so check-ups, office visits and shots (among a few other services) are often your responsibility. This can make indemnity insurance impractical for a large family that requires a lot of routine visits and preventative care.

Your costs with fee-for-service health care

Having a choice in you primary caregiver, specialist, hospital and surgeon does not come cheap. While it's hard to predict the annual cost of health care under an indemnity insurance plan, there are a few costs that come pretty standard:

  a monthly health insurance policy premium,
  a yearly deductible that must be paid out of pocket before your health insurance begins to contribute,
  a per visit out of pocket payment that is either coinsurance (a flat rate charge) or a percentage of the health care expenses (a fraction of the bottom line) that must be paid by you, then insurance covers the rest.

As a rule, health care services not covered by your health insurance policy (like check-ups) don't count toward satisfying the deductible. (If this seems like a foreign language right now, don't worry. By the end of this Guide, you'll be speaking (and understanding!) Insurance jargon like a pro!)

Of course, not all fee-for-service health plans are created equal. There are various levels of coverage available.

Basic, comprehensive, and major medical insurance

There are three kinds of indemnity insurance coverage:

  Basic health insurance
  Major Medical insurance
  Comprehensive insurance


Basic health insurance includes:

  Hospital room and board and hospital care.
  Some hospital services and supplies such as x-rays and medicine.
  Surgery, whether performed in or out of the hospital.
  Some doctor visits.


Major Medical insurance includes:

  Treatment for long, high-cost illnesses or injuries.
  In-patient and out-patient expenses.

Comprehensive insurance is a combination of the two. The cost of your plan will vary with the level of coverage. Major medical insurance, for example, though popular, can carry a hefty price tag.

Bottom line: fee-for-service health plans offer choice and security. But these advantages are reflected in the cost of indemnity insurance. Your other option?
Managed care - which is up next.

Want to start researching policies? Compare online indemnity health insurance quotes in seconds.


Next: Managed care organizations and different types of managed care health plans