Overview: The way a plan calculates how much it pays for a covered service is just as important as what it covers — and the difference between scheduled and non-scheduled plans has major financial consequences for policyholders.

How Scheduled Benefit Plans Work

A scheduled benefit plan (also called a fixed indemnity or fee schedule plan) contains a literal schedule — a list of medical procedures paired with the maximum dollar amount the insurer will pay for each. If you break your arm, the policy might say it pays up to $800 for an emergency room visit and up to $1,200 for a fracture reduction. The insurer pays those amounts regardless of what the provider actually charges.

The financial risk from a scheduled plan is balance billing. If your surgeon charges $2,000 for a procedure scheduled at $1,000, you owe the $1,000 difference out of pocket. Because healthcare costs rise over time while scheduled benefit amounts are often static, the gap between what a plan pays and what providers charge can grow substantially. A schedule that was adequate in 2000 may cover a fraction of modern procedure costs.

On the positive side, scheduled plans offer maximum transparency — before receiving care, you can look up exactly what the policy will contribute. They also tend to carry lower premiums because the insurer's exposure is capped by the schedule.

How Non-Scheduled (Service) Plans Work

A non-scheduled (service) plan does not use a fixed dollar list. Instead, it reimburses based on the Usual, Customary, and Reasonable (UCR) cost of the service — the typical charge for that procedure among physicians with similar training in the same geographic area. The insurer determines what is "reasonable" for the specific market and pays a percentage (or all) of that UCR amount.

Under a service plan, the insured is generally protected from paying the full undiscounted retail price of care. When a plan contracts with a network of providers (as virtually all modern plans do), those providers agree to accept the plan's negotiated rate as payment in full, eliminating most balance billing for in-network services.

Worked Example: Appendectomy

To make this concrete, assume a surgeon charges $1,500 for an appendectomy. The UCR for that procedure in the patient's area is $1,200.

Under a scheduled plan (schedule lists $1,000 for this procedure):

Insurer pays: $1,000
Patient owes: $500 (the $1,500 bill minus the $1,000 scheduled benefit)

Under a non-scheduled (service) plan (80/20 coinsurance, UCR = $1,200):

Coinsurance applies to the UCR amount: 80% of $1,200 = $960 paid by insurer; 20% of $1,200 = $240 owed by patient
Additionally, the patient owes the "excess" above UCR: $1,500 − $1,200 = $300
Total patient cost: $240 + $300 = $540

If the surgeon had charged exactly $1,200 (equal to UCR), the patient would owe only the 20% coinsurance ($240) with no excess balance.

The core exam point: scheduled plans offer predictability of what the plan pays but potentially large patient responsibility if charges exceed the schedule; service plans link payment to actual market costs, offering better inflation protection but still exposing patients to excess charges above UCR from out-of-network providers.