Larry Levitt of the Kaiser Family Foundation helped walk listeners of California's KPCC radio through all the baffling terminology, and what's hidden behind those acronyms and how to figure it all out.
The first thing, he says, is to not give in to your first instinct to ignore it all and just let stay in your current plan.
But it's a lot easier to want to wade into shopping for health insurance—even among your employer-sponsored plans—if you know what in the hell they're talking about with their PPOs, EPOs and HMOs. Those are the three main types of policies you'll probably be seeing. Within those categories, you'll also see POSs and HDHPs. To wade through what all of this means, head below the fold."There are lots of reasons to shop around, particularly this year," he says. […]
"Some plans are increasing premiums, some plans are decreasing premiums," he says. "So you could find yourself saving a lot of money if you switch plans."
EPO stands for "exclusive provider organization." These are plans that have very narrow provider networks—that means that they contract with just a handful of doctors, labs, or hospitals, and that someone on one of these plans will only be covered if they see go to these providers. But the advantage of an EPO is of use for the patient within those networks. For example, there aren't gatekeepers—you don't need a referral from a general practitioner to see a specialist. But if you see someone outside the EPO network, you have to pay 100 percent of the bill.
PPOs are "preferred provider organizations." They've traditionally been the most flexible (and most expensive) plans, with large provider networks and fairly generous coverage for care even outside of the network. But in some states lately, PPO plans have been getting narrower in order for companies to save money. That can cause real problems for someone with a PPO plan who goes to a regular provider only to learn afterward that that doctor isn't in their network anymore. It's happened.
If you have a PPO plan and want to stick with it, double check with providers and with the insurance company to make sure that the doctors you want to see are still in the plan. It's another good reason to use the open enrollment period to make sure your insurance plan still fits. It's sort of like checking your smoke detector batteries when resetting your clocks twice a year—use this as an opportunity to make sure you're going to be covered the way you want to be next year.Business owner Pamela Robins experienced a similar problem. It was only after undergoing expensive surgery to repair a broken collar bone, that her providers realized they weren't part of her Los Angeles area Blue Shield PPO.
"I went into admissions, I gave them my card, I was accepted for surgery that day and I had the surgery," she says. "And then I got a bill for $76,000."
The final category of plan is the least flexible. That's HMOs, or health maintenance organizations. HMOs are comprehensive systems, with doctors, labs, hospitals and pharmacies all within the same system within which you have to stay to have your care covered. HMOs require a primary care doctor acting as a gatekeeper, providing referrals for every service. But no matter who you see, your visit is going to be covered, so an HMO provides certainty. They're also often the least expensive option—a closed and integrated network is easy and cheap to administer, so costs are easier to control and that trickles down to the patient.
But that's not all! There are other plans, like POSs—point of service plans. They function much like PPOs, in which you can see any provider within the network without a referral, but have to have one to to see an out-of-network doctor. There are also HDHPs, high deductible health plans, that have low premiums but high deductibles. These lower-premium, higher-deductible plans allow HSAs—health savings accounts. Those are savings accounts dedicated just for medical expenses, to help cover the stuff you have to pay for out-of-pocket (OOP, if you're feeling alphabet happy by now). HSAs are not subject to federal taxes, and can roll over year to year. There are also FSAs—flexible savings accounts, which function sort of the same but are use-it-or-lose-it. You can't roll them over year to year.
To make it even more fun, some insurers (like Blue Cross and Blue Shield) have things like CDHP, or consumer directed health plans, which are like HDHPs, but apparently "consumer directed" sounds better than "high deductible."
Finally, even within all of these types of plans, there are different options. Obamacare and the exchanges call them Gold, Silver, and Bronze, but they'll go by different monikers depending on your insurance. For example, I'm offered through Blue Shield of California a whole bunch of PPOs like PPO500, PPO750, PPO5000, etc. The difference among these is how much of a deductible you'll have to pay and what your out-of-pocket limits will be.(Obamacare limits out-of-pocket expenses to $6,350 for an individual plan and $12,700 for a family plan.) The plans with lower deductibles and other costs generally have higher premiums, but that's not all. It's worth reading the synopsis provided by your provider of what all is covered, partially covered, or not covered in each plan.
It's eye-glazing stuff, but if you know some of these basics going into the process, it takes away one layer of incomprehensibility. Going through the process is certainly worth your time. You could save yourself some unwelcome and expensive surprises in the event of an accident or illness, or even just some money on monthly premiums.
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