Choosing A Health Plan

Choosing between health plans has never been easy and it seems to get more difficult with each passing year. As a healthcare consumer, it's important to educate yourself about health plan options. You'll want to consider the costs, benefits, ease of obtaining medical services and how well the plan matches your and your family's needs. This guide will help to increase your knowledge, set priorities for what you need most and, ultimately, select the health plan that's right for you.

Step 1: Gather Basic Information

A variety of health insurance plans exist today, from traditional "fee-for-service" to high deductible account-based options. Here are definitions for the most common plan designs:

  • Traditional Health Insurance. Also known as "indemnity" insurance; you choose your doctor and hospital, and you or the provider send the bill to the insurance company. You pay an annual deductible after which the insurance company generally pays 80% of the "usual and customary" charges and you pay the remainder. This option gives you maximum freedom in choosing providers, but you will generally pay more out of your own pocket.
  • Managed Care Options. Managed care plans were designed to help control the cost of health care services, while ideally improving quality, too. You give up some freedom in terms of which providers you can use, but get lower out-of-pocket costs in return.

    The following plan types represent common managed care options:

    • Health Maintenance Organization (HMO). You choose a primary care physician (PCP) who will provide routine care and coordinate specialty referrals. You must use providers who are within the HMO's network and get a referral from your PCP for most other medical services. You may have co-pays ($5-$50) for covered services, but usually pay nothing else as long as you receive care from network providers.
      • Medical Group Model. A form of HMO in which members select a subset of independent physicians that have contracted with the health plan to provide medical services. Some HMO's require you to choose a medical group (sometimes known as an "IPA"), as well as a PCP. If this is the case, it is important to remember that your selection of hospitals and specialists is often limited to those providers that contract with the particular medical group.
      • Staff Model. In this type of HMO (Kaiser is the most famous example), most of the doctors, ancillary providers and hospitals belong to the same organization. Members need to stay within the staff model network, except for certain circumstances such as emergency care. Staff model providers do not belong to other health plan networks, in contrast with doctors and hospitals participating in other types of health plans.
    • Preferred Provider Organization (PPO). You choose physicians and hospitals from a network that has agreed to accept discounted rates for services. You may also see physicians outside the network, but at a higher cost.
    • Point-of-Service Plan (POS). Also known as an "open-ended" HMO, this type of plan enables you to choose network or non-network providers for medical services. You'll pay higher deductibles and copayments if you use non-network providers.
    • Exclusive Provider Organization (EPO). You receive care from a network of providers that have agreed to provide services on a discounted basis. Referrals are typically not required to obtain care within the network, but if you see a provider outside of the network, you will not usually be reimbursed for the cost.
  • High Deductible Plan. This health plan covers major medical expenses after you meet your yearly deductible. With many high deductible plans you do not receive coverage for prescriptions and may not receive coverage for preventive care, such as physical examinations, until you meet your deductible.

    Increasingly, employers have combined traditional high deductible plan designs with personal accounts that may be used to cover medical services that are obtained before the individual meets the deductible. This type of plan is often known as a Consumer Directed Health (CDH) Plan.

    CDH plans are typically augmented with one of the following funding options to use for medically related expenses:

    • Health Reimbursement Account (HRA). An account, generally funded by the employer group, that helps offset the expenses of care received before meeting the plan's deductible. While HRA account balances may carry over from year to year, the funds typically revert to the employer when the employee disenrolls from the plan.
    • Health Savings Account (HSA). Similar to an HRA, this account can be used to help offset deductible and other medical expenses. Unlike an HRA, employees may also contribute pre-tax funds to the account and it is portable if the employee takes a new job. For more information on this type of plan, ask CareCounsel for our tip sheet on Health Savings Accounts.

Step 2: Assess Your Needs

To help narrow your search for the health plan that best matches your needs, take a look at your current health care use, anticipated medical expenses, and what services are most important to you and your family. Ask yourself the following questions to help you evaluate your current situation:

  • Do you want to continue your relationship with your current primary care physician? Is he/she part of your new health plan?
  • Do you want the flexibility of seeing out-of-network providers?
  • Do you use healthcare services frequently, e.g. for a chronic disease?
  • Do you have children who require preventive care, such as immunizations or frequent physician or emergency room visits for accidents?
  • Have you evaluated individual health plan options as an alternative to group insurance? Sometimes it can be a cost-effective option, especially for younger children. Information on individual health plan options is available by clicking on the "Resources" tab on our website at http://www.carecounsel.com.
  • How much can you afford to pay for monthly premiums? Keep in mind that a lower monthly premium doesn't necessarily save you money. Make sure you thoroughly evaluate your potential out-of-pocket expenses.
  • Do you anticipate hospital stays, e.g. pregnancy? Could you afford the coinsurance rate if you had an unexpected hospitalization?
  • Are you currently being treated for a medical condition? Will the plan cover treatment immediately or is there a waiting period?
  • Do you travel frequently? Will the health plan cover medical expenses if you are out of the area?
  • Would you prefer to receive care at a particular hospital? Is it part of the plan's network? If you signed up for a medical group within a HMO, is the hospital in their network?

Step 3: Compare Plans

Although it may be difficult to find one health plan that offers exactly what you need, you'll benefit from taking a closer look at your options and making a list of pros and cons for each plan. You'll want to compare the plan's benefits, access, costs, convenience, customer service, and quality, and then decide which plan best fits your healthcare needs.

  • Benefits/Coverage
    • Have you reviewed the plan's written description of its benefits (known as "Evidence of Coverage" or "Summary Plan Description") to verify covered services and benefit limitations?
    • Does the plan cover preventive care, such as physical exams and immunizations?
    • If you travel, how does the plan cover your medical expenses?
    • Will your child be covered as a dependent and up to what age?
    • What coverage is available for rehabilitation therapy (physical, speech, or occupational)? Are there session or dollar limitations?
    • Will your prescriptions be covered and does the plan have a formulary or tiered drug benefits? If you have a chronic condition, is your medication on the formulary?
    • Does the plan cover complementary care, like chiropractic and acupuncture? Are there session or dollar limitations?
    • Will mental health treatment be covered, and for how long?
    • What are the plan's guidelines for covering experimental treatment and clinical trials?
    • What other medical services, such as nursing home care or drug/alcohol treatment, are important to you and your family? Does the plan provide coverage?
  • Access
    • Are the doctors and specialists who currently treat you a part of this plan? Are they accepting new patients for this plan? (Often health plans list many doctors, while only a small portion are accepting new patients.)
    • Do you need a referral to see a specialist? What is the average wait time to see a specialist? If you have a chronic disease, how long will the referral last?
    • How do you change your doctor if you are unhappy with him/her?
    • Does the plan offer information about the cost and quality of doctors within its network? Does it identify high performance doctors on its web site and describe the criteria used to make these rankings?
    • What hospitals and clinics can you use with the plan?
    • How long will you need to wait for medical appointments? Are the hours convenient?
    • Are there urgent care options, so you don't need to go to an emergency room for care you need after normal business hours? If you require emergency room treatment, what are the plan's procedures for getting it approved?
    • Does the plan offer bilingual services, if needed?
  • Costs
    • What will you need to pay for monthly premiums?
    • What are the plan's deductible, copay, and coinsurance rates?
    • Is there a maximum amount that the plan will pay on an annual and/or lifetime basis?
    • Will you need to pay more if you see an out-of-network provider?
    • Does the plan provide cost information on its web site that allows you to make informed decisions before seeking care?
  • Convenience
    • Do you have to file claim forms?
    • Are doctors, hospitals, and pharmacies near your home?
    • How often can you change doctors?
    • Does the plan offer a telephone nurse advice line?
    • Does the plan let you track claims and payment status on its web site?
    • Does the plan allow email communications with doctors?
  • Customer Service
    • Does the plan survey its members to determine how satisfied they are with the services? Will they make this information available to prospective members?
    • How easy is it to reach customer service staff on the plan's toll-free number? Do you have to wait a long time? Test it out before selecting a health plan.
    • Can you contact customer service through email or "live chat"?
  • Quality
    • Does the plan offer wellness benefits like health risk appraisals, smoking cessation, nutrition, stress management and well baby programs?
    • If you have a chronic disease, does the plan have a special "disease management" program where you can work with a nurse to manage your illness?
    • Does the plan offer an online medical record for members or provide online access to lab and test results?
    • Does the plan keep data on members' health outcomes that it's willing to share? (this is sometimes known as "HEDIS" data.)
    • Check out health plan "report cards" that compare plan performance, satisfaction and disenrollment data. Good sources for this type of comparative data can be found at:

      http://reportcard.ncqa.org/plan/external/Plansearch.aspx
      http://www.jdpower.com/Healthcare/ratings/health-plan-ratings
      http://www.opa.ca.gov/report_card (California only, but includes medical group ratings).

Step 4 Ask for Recommendations

  • Ask your family doctor to comment on the plan's:
    • Ease of specialty referrals and availability of specialists
    • Hospitals, formulary, preventive care
    • Claims and utilization review process
  • Ask family and friends for recommendations, especially if they are healthcare professionals.
  • Talk over any questions or concerns with a CareCounselor.

Step 5 Make Your Choice

Your ultimate choice in health plans should match your needs and priorities at a reasonable cost. It's important that your decision be based on complete information. So be sure to read all available health plan materials and contact the health plan representative or CareCounsel, if you still have unanswered questions. Once you understand and compare your different health plan options, you can pick the one that best fits your family's needs.

For more information, contact CareCounsel at 1-888-227-3334.

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