Typically, this is the time of year when businesses and their employees enroll in new healthcare plans for the next year. In addition those who purchased plans through a state or federal exchange will have an opportunity to enroll or change their existing plan.
Selecting an option that meets individual or family healthcare needs for 2016 can be a challenge, particularly if you are unfamiliar with the process. To ease your mind going into the 2016 open enrollment season, here are some common questions and answers.
Q: How do I know which plan is best for my situation? For instance, should I go with a health maintenance organization (HMO) or a preferred provider organization (PPO)?
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A: The easiest way to determine which plan best suits you is to understand how both options are different. An HMO has a primary care physician who you see to handle all of your referrals. There are no out-of-network benefits with HMO plans, meaning all your doctors and facilities must be in network. A PPO does have out-of-network benefits and provides more latitude on who you can see and where. They generally cost you more for the same services rendered than an HMO.
Q: What are some of the basic health insurance terms that people should be familiar with?
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A: A 2014 survey conducted by Blue Cross and Blue Shield of Georgia found that 60 percent of consumers don’t know what a deductible is, and 85 percent don’t know the difference between copayment and coinsurance.
To fully understand the process, it’s important to know the following terms:
• Copayment - a fixed amount you pay whenever you use a particular type of health care service. For example, you might have a $35 copay to see a primary care doctor and a $20 copay to fill a prescription.
• Coinsurance - unlike the fixed cost of a copayment, with coinsurance you pay a percentage of the cost of a healthcare service and your insurer pays the rest. For example, if you have a 20 percent coinsurance for hospitalization, that means you pay 20 percent of the cost of hospitalization and the insurance company pays 80 percent.
• “Out of network” services – an out of network provider is one who has not contracted with your insurance company for reimbursement at a negotiated rate. Some health plans, like HMOs, do not reimburse out of network providers at all, which means that it would be your responsibility to pay the full amount charged by the doctor. Other health plans offer coverage of out of network providers but your responsibility would be higher than if you were to see an in-network provider.
• Deductible – the amount you must pay out of pocket each year for health-related costs before your insurance policy begins to pay.
• Maximum Out-of-Pocket Expense – the most you will have to pay for covered medical expenses in a plan year through deductibles and coinsurance before your insurance plan begins to pay 100% of covered medical expenses.
Q: What are some of the most common mistakes people make when completing their open enrollment documents?
A: People tend to not spend enough time researching and studying which plan works best for them. Our lives change during the year, and this could have an impact on the health insurance we need. Look at what you spent this past year on medical expenses and what you know you will spend next year. That should help you pick a plan that is right for you.
If you are already being cared for by a physician, you need to confirm if your doctor is in the plan. You can do so by checking the plan’s online directories or speaking with the billing coordinator at your physician’s office.
Many companies and health insurers offer web-based tools to help you decide on the best plan, and I would encourage everyone to use these options. For example, some companies have calculators to see if users qualify for a subsidy to cover their insurance costs and a “Know Your Cost” tool.
Last, not enough people take advantage of the wellness options and benefits that are available to help them not only stay healthy, but save money on their insurance.
Mark Kishel, M.D., FAAP is Regional Vice President and Senior Clinical Officer for Blue Cross Blue Shield of Georgia and a Fellow of the American Academy of Pediatrics
