Ahhh…it’s everyone’s favorite time of year. The leaves on the trees are changing. A crisp chill fills the air. Apple cider. Halloween. Holiday plans. Boots, fleece and turtlenecks rear their heads…and yes…so does Open Enrollment for healthcare benefits and the stress and confusion it brings.
Open enrollment reminds me of registering for college classes on the first day of freshman year. You have no freaking idea what you are doing and all you really care about is living outside of your parents’ house and finding the football stadium. You know the class requirements you need for your major but you are clueless about what you’re signing up for or what questions you should be asking before you enroll. You read the class description, think, “Yeah, that sounds good enough,” and run off to find the nearest tailgate only to find yourself drowning mid-term. Ugh.
It’s not until sophomore year that you start asking the questions you wish you would have known to ask. Who’s teaching the class? How many papers do I have to write? How do they grade? Who do I know that took this class? Did they like it?
When it comes to Open Enrollment, I have done your healthcare homework for you. Below are then 10 questions I think you should ask about every health insurance plan you are considering, whether you are looking at employer sponsored plans or health exchange based plans. The pressure is on for every American to have some kind of coverage. Access to care and coverage is better than ever, which means there are more choices than ever. Choose wisely! I also included a glossary of healthcare terms for when you get stumped.
What is the difference between a PPO, EPO, HMO, POS, HDHP and HSA?
Healthcare nerds love acronyms. Really, they entertain us. These various types of alphabet soup plans are simply insurance products. Like cars, for example, each have different price points, different options and tradeoffs! Some are go-karts and others Bentleys.
HMO – Health Maintenance Organizations
As the name implies, these plans are great for maintaining health…when you are already healthy. HMO’s are usually lower cost and use the “gatekeeper model” via the use of a “Primary Care Physician” who authorizes referrals for specialty care. The trade off is control. The upside is that HMO’s are cost effective and provide good preventive care. If you or someone in your family develop a health condition, you may not be able see the specific specialists you want to see within that particular HMO network. Be warned.
PPO – Preferred Provider Organizations
PPO’s provide freedom of choice. They cost the most but also give you the most control over your care. In my own personal opinion, these are the plans you want when you actually have health issues and want the ability to see who you want, when you want. Patients do not need referrals for specialty care, which is the main attraction.
EPO – Exclusive Provider Organization
I like to think of EPO’s as “PPO lite”. With an EPO, you have the freedom to choose among providers within an exclusive network and do not need a referral to see them. If you go outside the network, however, you will pay for it.
POS – Point of Service
POS plans are like a chocolate/vanilla swirl of PPO and HMO benefits. You still need a Primary Care Physician (PCP) to coordinate your care. See an in-network specialist that your PCP refers you to – you’re in the green. Go out of network and you will pay.
HDHP – High Deductible Health Plan (with or without a Health Savings Account – HSA)
HDHP’s have the lowest monthly premium usually because the deductible is high and the risk/liability for payment is on the consumer. These insurance products are great for people who are healthy, low healthcare utilizers…especially if they can sock away some money in a health savings account.
What is the difference between the health exchange plan levels – Catastrophic, Bronze, Silver, Gold and Platinum?
I like the WebMD summary best. Generally…
Platinum: Covers 90% of your medical costs; you pay 10%
Gold: Covers 80% of your medical costs; you pay 20%
Silver: Covers 70% of your medical costs; you pay 30%
Bronze: Covers 60% of your medical costs; you pay 40%
Catastrophic: This plan only covers your medical expenses after you have reached the annual deductible of $6,350 for an individual or $12,700 for a family. Catastrophic plans must also cover the first three primary care visits and preventive care for free, even if you have not yet met your deductible.
What does the plan cover?
Thankfully with the Patient Protection and Affordable Care Act, the following “essential benefits” are covered. The devil is in the details…depending on the insurance product you choose, these may be covered only partially…read carefully!
- Preventive services (e.g., immunizations) and chronic disease management (e.g., diabetes)
- Emergency health services
- Inpatient care
- Maternity and newborn care
- Pediatric health services, including dental and vision
- Mental health and substance-abuse treatment
- Outpatient services
- Lab tests
- Prescription drugs
- Rehabilitation services
Does the plan cover your favorite doctors?
Check the website and call either the health plan or physician office if you are not sure. Don’t make the mistake of assuming they participate in the health plan.
Does the plan cover your prescription medications? What is the out of pocket cost?
Learn about your insurance product’s prescription drug “formulary”. Study it and make sure all of your medications are covered, preferably as generics, which are always less expensive. Compare pricing for a 30-day supply verses a 90-day “maintenance” supply (usually available via mail order pharmacy). Call if you are not sure.
Is your hospital/health system of choice included?
Check the website and call either the health plan or hospital if you are not sure. Don’t make the mistake of assuming that your hospital of choice or the one closest to where you live participates in your health plan.
What are the costs associated with the plan?
Learn about: premiums, deductibles, co-insurance, co-pays and out-of-pocket maximums.
Premium – The amount a heath plan member pays to maintain active coverage. You and/or your employer (or a combination of the two) pay it monthly, quarterly or yearly.
Deductible – The amount you pay each year before the insurance company starts paying. Most/all plans have preventive health services that are covered in full even if the deductible has not been met. Keeping you healthy is in the best interest of your health plan! As an example, if your deductible is $1,000, then you pay up to $1,000 for all services (except for preventive/deductible exempt services) and then full benefit coverage kicks in. Know which benefits are “deductible exempt” as well as those that are not fully covered until the deductible is met.
Copay – Copays are one way health plans share costs with their members. They are a set amount you pay for a specific service like a doctor’s visit emergency room visit, etc. You pay your part and the health plan picks up the rest! Plans that have low or no co-pay usually have a higher monthly premium. They are going to get it out of you one way or another…it’s all about tradeoffs!
Coinsurance – Coinsurance is different than a copay because it’s usually a percent of cost instead of a flat/fixed amount like a copay is. For example, a MRI might cost $350 and a member may have a 20% coinsurance for that type of a procedure/Radiological study. This varies based on which location/provider you chose to obtain care at. Shop around for services with co-insurance and ask your health plan if they have providers they consider “in network” for the lowest out-of-pocket expense possible!
Out of Pocket Maximum – This is the most you will ever pay out of pocket in a benefit year. Once you hit this, the health plan assumes 100% financial responsibility. Some plans have “individual” and “family” maximums. Read carefully as you may reach an individual maximum and still owe money because you have not met a family maximum.
Does the plan cover alternative therapies like acupuncture, chiropractic, and massage?
Am I planning to have a major life/health event? A baby? A surgery?
This can really influence what plan you choose…as it should! The last thing you want to experience is becoming pregnant and realizing that the “perfect birth” was not possible because your plan does not cover your physician, your hospital of choice or your doula! Or having major surgery planned and learning that you are going to owe thousands of dollars if you have it at the hospital you prefer by the surgeon you prefer because they are out of network.
Who do I know who has had experience with this plan? Did they like it?
This goes back to the college metaphor. Ask about the class before you sign up for it. It’s easier than ever with access to online ratings and social networking. Information is at your fingertips…ask around!
Please send me any other questions.
Health Insurance Glossary of Terms: