During the Open Enrollment period (which ends January 31, 2016), many people are shopping for new health insurance. To make sure that your health coverage aligns with your needs, it’s important to ask the right questions. For instance, a Commonwealth Fund study found that about 41 percent of adults with gaps in health insurance coverage or those underinsured – approximately 72 million working-age people — reported problems paying medical bills or were paying off accrued medical debt during the past year. Similarly, a Harvard study found that half of all bankruptcies are caused by medical bills, and three-fourths of those bankrupted had health insurance at the time they got sick or injured.
Before choosing a health insurance plan, ask these questions to protect yourself as much as possible from getting stuck with medical bills when you need care. Keep in mind that there are no guarantees, since your health insurer will decide whether a specific treatment you need will be covered, and you may not be able to find out ahead of time.
5 Questions to Ask When Choosing a Health Plan
- Cost — Most people are only concerned with their premiums and copays thinking about the amount they will have to pay in an average year. But insurance should be about being protected if the worst happens. You will likely have more coverage and greater financial protection in a plan that covers all types of care and costs you more in an average year, but has an out-of-pocket maximum for which you can budget.
So, you should certainly know the answers to the following general questions:
- How much is my monthly premium?
- Will I have to pay an annual deductible? (Amount you have to pay out-of-pocket before the plan starts to pay for anything.)
- How much is my copayment for a visit with my PCP or a visit with a specialist?
- How much will I pay for brand-name drugs? How much for generic drugs?
- How much will I pay for a hospital stay?
- How much will I pay if I use a non-network doctor or hospital?
- Are there higher out of pocket payments for certain types of care, such as hospital stays or cancer treatment?
But make sure you know the answer to these questions, which most people never ask:
- Is there an annual out-of-pocket maximum? (After you spend a certain amount–not including premiums–will your care be fully covered or very low-cost?)
- Are all services included in the out-of-pocket maximum? (For example, some plans may not include some or all of the cost of chemotherapy drugs in their out-of-pocket maximum.)
- Is the out-of-pocket maximum an amount I can afford?
- Benefits — When you need medical care, if the type of care you need is not covered, you will have to pay for it entirely out-of-pocket. Find out exactly what the plan covers before joining:
- What benefits does the plan offer? Does it cover mental health care, prescription drugs, physical therapy?
- Are any prescription drugs you take on the plan’s formulary (list of covered drugs)?
- Are there limits or caps on any benefit? For example, does the plan only cover a limited number of physical therapy visits?
- Access to Health Care — Not following your plans rules can cost you because the plan can deny payment. Make sure you choose a plan whose rules you can live with:
- How long will I have to wait for an appointment with my PCP or a specialist?
- Do I need a referral to see a specialist? How easy is it to get referrals to specialists from my PCP? How long does each referral last?
- Does my doctor need to get approval from the plan to admit me to a hospital?
- Does the plan provide an incentive for my doctor to deny or reduce services? For example, does it cost my doctor money if she provides costly services to me?
- What do I have to do in an emergency to ensure my care will be covered?
- Doctors, Hospitals and Other Health Care Providers — Generally, you will have to pay less if you see doctors and other healthcare providers that contract with your health plan—are in the plan’s network. In some plans, like HMOs, you may have to pay the full cost of care from out-of-network providers. In some plans like PPOs, you may have to pay a higher coinsurance to see out-of-network providers:
- Will I be able to use my doctors? Are they in the plan’s network and are they taking new patients under that plan?
- What will happen if my doctors leave the plan?
- Service Area — If you frequently travel or live part of the year in a different state, make sure you will be covered wherever you are:
- What service area does the plan cover?
- What kind of coverage do I have if I travel outside of the service area?
Cautionary Tale: Avoid the Pitfalls
According to nonprofit consumer protection organization Consumer Watchdog, consumers shopping for/enrolling in health plans or thinking about switching health plans need to be aware of five (5) significant challenges to quality care. These include:
- Narrow Provider Networks: Limited doctors and hospitals (“providers”) are available in-network and as a result consumers face large unexpected medical bills. TIP: Check your insurer’s website to confirm your doctor or hospital is in-network.
- EPO Plans Provide No Out-of-Network Coverage: Many consumers do not know that EPO health plans provide no out-of-network coverage, leaving consumers to pay the full cost of care. TIP: If you choose to buy an EPO plan, only visit in-network doctors and hospitals.
- Multiple Deductibles and Skyrocketing Costs: Consumers now face “out-of-network” deductibles that require them to pay far more before insurers contribute toward the cost of care. TIP: Check your policy first, to determine if you will face higher costs when visiting out-of-network doctors and hospitals.
- Cancelled Plans and Fewer Options: Companies are cancelling plans leaving consumers to scramble to find replacement coverage with fewer options. TIP: Don’t be left without coverage – the deadline to enroll or switch is January 31, 2016.
- Insurers Shifting the Cost of Care to Consumers: California insurers have cut access to doctors and hospitals. TIP: Take “screenshots” of your health insurer’s website listing your doctor as in-network in case your claim is denied.
Consumer Watchdog warned that some of the new threats facing consumers are unavoidable and said the best consumer tip is to keep good notes and records in case consumers have an unexpected problem with their health plan.
“In order for Obamacare to succeed, consumers need coverage that actually gives them affordable access to doctors and hospitals,” said Laura Antonini, staff attorney at Consumer Watchdog. “But consumers face threats to their health and financial well-being as a result of new narrow networks, high deductibles, and limited coverage options.”
During the Open Enrollment period (which ends January 31, 2016), Californians may purchase health insurance either through the state health insurance exchange, known as “Covered California,” or directly from health insurers. Consumers who want coverage starting January 1, 2016 have until December 17, 2015 to sign up.
- Narrow Networks
A “Narrow Network” refers to the practice of health insurance companies dramatically reducing the number of in-network physicians and hospitals. Recent studies have found that Narrow Networks not only hurt consumer pocketbooks if they cannot identify in-network doctors when they need treatment, Narrow Networks also lead to worse health outcomes for consumers and delay the diagnosis of disease.
Consumer Watchdog attorneys are currently litigating class action lawsuits against major California health insurance companies. Patients were stuck with big medical bills as a result of receiving treatments from doctors and hospitals these companies represented were part of their networks but subsequently billed as out-of-network.
As discussed in the lawsuit against Blue Shield, Blue Shield provided highly inaccurate information about which hospital and doctors are included in the plans’ networks.
“When I chose to switch my health insurance to Blue Shield, it was important to me that my long-time primary care physician was included in the plan’s network,” said Barry Weiss, a former Blue Shield consumer. “Before enrolling, I confirmed through Blue Shield’s website that my doctor was ‘in-network.’ I even called Blue Shield and my doctor to double-check. It was only after I visited my doctor for routine check-ups that the bills started rolling in informing me for the first time that my doctor was in fact out-of-network and Blue Shield was only covering a fraction of the cost. I was deceived into buying a Blue Shield plan that did not include the coverage I was told I was purchasing.”
Download the class action lawsuit against Blue Shield here: http://tinyurl.com/l2k4aq7
- EPO Plans Provide No Out-of-Network Coverage
EPO stands for “Exclusive Provider Organization.” An EPO plan uses a specific network of hospitals and doctors. Like an HMO, there is no coverage if a consumer sees doctors who are not in the network, except for emergency care. If a consumer in an EPO or HMO receives care from a doctor who is out-of-network, the consumer must pay the full cost of care out of pocket.
Many consumers are unfamiliar with the term “EPO” and do not know that EPO plans offer no out-of-network coverage. The class action lawsuits being litigated by Consumer Watchdog attorneys outline some of the pitfalls of EPO plans, including failures to clearly inform consumers about the lack of out-of-network coverage and potential out of pocket costs a consumer could face by enrolling in an EPO plan.
Furthermore, some insurance companies in California that offer both EPO plans and PPO (“Preferred Provider Organization”) plans throughout the state offer fewer doctors in their EPO plans compared to their PPO plans.
According to Consumer Watchdog’s lawsuit against Health Net, Health Net’s EPO plans offer 54% fewer doctors compared to its PPO plans, and no out-of-network coverage. If a consumer receives care from a doctor not participating in Health Net’s limited EPO network, the consumer must pay the full cost of care out-of-pocket. According to the Health Net lawsuit, Health Net misrepresented its EPO coverage to consumers.
Download Consumer Watchdog’s lawsuit against Health Net addressing the EPO issue here: http://tinyurl.com/hq8lsna
- Multiple Deductibles and Skyrocketing Costs
Consumers in PPO, EPO and HMO plans must meet an annual deductible before their insurer will provide any coverage. Once a consumer has met their plan’s annual deductible, they will share the cost of services with their health insurer.
Insurers are using multiple, and often hidden, annual deductibles and out-of-pocket limits to shift the cost of care on to consumers: new PPO plans contain out-of-network deductibles and out-of-network “out-of-pocket maximums” that are drastically higher than the in-network equivalents. Additionally, consumers are required to pay 50% or more of the cost of services provided by out of network physicians even after consumers meet their deductible.
For example, Cigna’s PPO plans require consumers to meet out-of-network deductibles as high as $12,500 before Cigna will pay any amount for medical care provided by out-of-network providers. Due to hidden limitations on coverage, a consumer must pay as much as $50,000—in addition to the amount consumers pay toward their premium—before consumers receive 100% coverage for out of network care.
“When my husband and I were shopping for health coverage, we looked for a plan that included Cedars-Sinai as in-network because that is where we wanted to deliver our baby,” said Lauren Katz, a Cigna consumer. “We chose a Cigna PPO plan because we believed doctors at Cedars-Sinai were covered. I chose an OBGYN who practiced at Cedars-Sinai because Cigna told me she was in-network. For a few months, Cigna even covered my medical care. Then, Cigna suddenly switched my OBGYN to out-of-network status leaving me with the bill. Even though I had already met the in-network deductible of $2,000, I suddenly faced huge, unexpected costs and would have to meet a second, out-of-network deductible of $12,500 before Cigna would cover my OBGYN. Cigna created so much stress for my family during a time that was supposed to be exciting in our lives. I feel betrayed.”
Download Consumer Watchdog’s class action lawsuit against Cigna here: http://tinyurl.com/k7lyacj
- Cancelled Plans and Fewer Options
Federal subsidies are available to Californians with an income that is less than 400% of the federal poverty level. To access those subsidies consumers must enroll in health plans through Covered California. However, consumers buying off the Covered California exchange have limited PPO plan options. In most of the state, only Blue Cross and Blue Shield sell PPO coverage through Covered California.
Companies are also cancelling policies, forcing consumers to find new coverage. For example, Health Net stopped selling PPOs through Covered California in 2015, and is now cancelling most of its off-exchange PPO plans. Consumers currently enrolled in a Health Net PPO in most California counties must sign up for new coverage during the 2016 Open Enrollment Period.
“Recently, I received a notice from Health Net that my PPO plan was being canceled, and Health Net would not be offering a PPO plan in the part of Los Angeles County where I live,” said Gerry Huffman, a Health Net consumer from Los Angeles. “I have done the research to try and find an available plan that covers the doctors and prescriptions I need to treat my serious medical condition, but I cannot find one. I fear that my health will be in danger if I cannot find a plan that covers the doctors and prescriptions that I need to live. I am left with no options.”
Additionally, consumers enrolling in United Healthcare plans should be aware that they may lose their coverage at the end of 2016. For the first time, United Healthcare is currently offering PPO plans on and off the exchange for the 2016 plan year. However, just days into the 2016 Open Enrollment Period, United’s CEO announced that it would likely be withdrawing from the individual market for the 2017 plan year.
- Insurers Are Enjoying Big Profits While Shifting the Cost of Care to Consumers
As premiums and cost-sharing increase, health insurance company profits are also rising. As reported by the Los Angeles Times, insurer profits surged in 2014: Blue Shield reported a profit of $107 million and Kaiser made $66 million in profit on Obamacare policies.
Limiting consumers’ access to doctors and hospitals in the Narrow Network plans drove insurer profits up. Consumers could not find in-network doctors or went to out-of-network doctors because of inaccurate provider lists. This reduced the number of claims that the insurers had to pay out while boosting profits.
“California insurers are raking in money while consumers are struggling to pay premiums and even use their health coverage due to soaring deductibles and shrinking doctor and hospital networks,” said Antonini. “Consumers are being taken advantage of.”
FOR MORE INFORMATION
SOURCE: Consumer Watchdog http://www.consumerwatchdog.org
is a nonprofit, nonpartisan consumer protection organization. Visit the website at: http://www.ConsumerWatchdog.org
MEDIA CONTACT: Laura Antonini, (310) 392-0522 ext. 318
REPORTING PROBLEMS: Consumer Watchdog urges consumers to report any problems to Consumer Watchdog on the group’s consumer complaint page available at http://www.consumerwatchdog.org/node/add/complaint