Despite gains in managed care and consumer-driven health plans in recent years, fee-for-service (FFS) health insurance remains a popular choice for families seeking comprehensive medical coverage. Also known as traditional indemnity plans, FFS private health insurance generally allows policyholders maximum control over which doctors they see and how they manage their health care.

As the name implies, FFS health insurance plans pay health care professionals a fee for each service they provide. Many plans limit their payments to fees that they consider "usual, customary and reasonable." In addition, indemnity health insurance may require that you meet a deductible - medical expenses that must be paid out of pocket before your insurance benefits begin - as well as co-payments for some care. However, many FFS health plans balance these expenses with an annual cap on your out of pocket costs.

Benefits of private FFS health insurance

One of the main benefits of FFS health plans is the flexibility they offer. Unlike managed care plans that may require you to use only specific in-network doctors and health care facilities, FFS insurance does not restrict your health care choices.

According to the California Department of Insurance, indemnity plans rarely limit your choice of doctor, specialist or hospital. In addition, most do not have any geographic requirements meaning that you can easily access premier hospitals and specialists that may be out of state. Be aware, though, the Insurance Information Institute cautions that some plans might require prior authorization for certain services.

While FFS health plans are not the cheapest health insurance on the market, they do often provide the most comprehensive benefits. These plans are best for families who expect to use health care services on a regular basis and want the ability to see their preferred doctors and specialists without restrictions.