ELI5: Explain Like I'm 5

Fee-for-service

Fee-for-service is like going to the store and paying for each thing you buy. So, if you want to buy a toy, you pay for the toy. If you want to buy some candy, you pay for the candy.

When you go to a doctor or a hospital, they can charge you for every service they provide to you. So, if you need medicine, you pay for the medicine. If you need to see a specialist, like an eye doctor or a heart doctor, you pay for that too.

This is different from other types of payment because if you go to a restaurant and order a meal, you pay one price for the whole meal, no matter how many extra things you get. But with fee-for-service, you pay for everything separately.

Some people like fee-for-service because they only pay for what they really need. But other people think it's not fair because they have to pay a lot of money for lots of different things.