By Sean Shaw, Florida Insurance Consumer Advocate
In my position as Florida’s Insurance Consumer Advocate, I often hear about how health insurance is letting our citizens down. Most often the complaint is that health insurance benefits are decreasing thereby leaving many people owing substantial amounts to health care providers after their health insurance has paid its share.
Due to rising health care costs, many health insurance plans have reduced covered benefits and pay less for what is covered. This can create overall confusion as to how our health insurance works. In the past major, medical insurance provided coverage when we went to the doctor, hospital, pharmacy or other health care facility. One just presented their insurance card, paid what they were told – which was usually very little - and went on our way. Now there are Health Maintenance Organizations (HMO) plans, Exclusive Provider Organization (EPO) plans, Preferred Provider Organizations (PPO) plans and hybrids or combination plans that we must try to navigate. These plans control costs by limiting coverage to a select group of health care providers. Insured’s must use these “in network” providers in order to maximize coverage. Given this framework, it is easy to make a misstep and end up owing health care providers a lot of money. In addition plan managers, as opposed to the treating doctor, have increasing power to decide how and when benefits may be used.
HMO plans have strict requirements to see only their providers; generally a primary care physician will control and direct your health care. You must go to the HMO’s hospitals, doctors or pharmacists. It is up to you, the subscriber, to verify that the providers are in the network. The only exception is for out of the coverage area emergencies, in that situation you are required to notify the HMO. Florida statutes outline the payment protocols in this situation.
Some HMO plans have provisions called Point of Service (POS) riders that may allow you to go to a doctor out of the network, but there are usually strict requirements, prior authorizations to obtain, deductibles, copayments and coinsurance to be paid. Additionally, if the provider charges more than the HMO allows, you are responsible for the difference. The POS rider gives you some added freedom, but make sure you understand the restrictions and cost.
EPO plans are similar to HMO plans in that you usually select a primary care physician who decides whether or not you can go see a specialist. You are limited to a restricted group of network providers and if you go out of the network there is usually limited coverage or no coverage at all.
PPO plans resemble historical major medical coverage, but with different benefit levels. Usually the highest level of coverage and protection comes from using “in network” providers. You generally have lower deductibles, lower copayments and lower coinsurance to pay. You also have protections from “balance billing,” whereby the network provider can’t charge more than the pre-negotiated amount. In this type of plan you usually have a lower level of benefits if you choose to go “out of network.” You have the freedom to select any provider you choose, but selecting “out of network” providers will generally subject you to higher deductibles, higher levels of copayments and coinsurance. You are not protected from balance billing. In other words, you are responsible for the difference between what the health insurance allows and what the “out of network” provider or hospital charges. Sometimes these differences can be substantial. This can be especially problematic when being treated in a hospital. Many hospitals subcontract with radiologists, anesthesiologists, pathologists and emergency room physicians who may not agree to accept the discounts the hospital has negotiated. You may go to the “in network” hospital and end up being treated by subcontracted providers, each of which may bill you separately. Here are some tips to prevent unexpected costs:
Read your insurance materials carefully
Ask Questions
Evaluate the Cost Ahead of Time
What to do if your health care plan denies your claim or pays less than you think should be paid