CHOOSING A HEALTH PLAN
ASK BEFORE YOU SIGN UP
For individuals choosing a health
plan during open enrollment periods this fall, Consumers Union, the publisher
of Consumer Reports, has developed a list of questions to ask before signing
up with any particular plan. While no list of recommendations can fully address
the issues that consumers face, the following tips are an attempt to provide
you with guidance as you make this important decision.
While choosing a plan may seem daunting,
if you have this choice, consider yourself lucky. More than forty million Americans
don’t have any form of health insurance. Others who have insurance don’t have
any choice about which plan will provide them with care. So take the time to
think carefully about your needs and your options, and then make a well-considered
BEFORE YOU SIGN
ASSESS YOUR FAMILY’S
While you cannot predict all your
needs, it pays to make a list of all the services you expect to need in the
coming year and then evaluate each plan according to your own list. Consider
these questions as you assess your family’s needs:
- Do you or a family member require
specialists or specific treatments?
- Does someone in your family need
chronic care or costly medication?
- Will the location of the doctors
make transportation an issue?
- Do you prefer to use a nearby
hospital? Not every plan uses the nearest hospital.
- Do you or family members require
mental health benefits?
- What other factors are important
a specific doctor?
direct access to a specific gynecologist or pediatrician?
a clinic that is open in the evenings?
no or low drug co-payments?
- Do you need ancillary services
such as vision, dental or medical equipment? Will you require home health
IF YOU NEED SPECIAL TREATMENT,
YOU SHOULD CONDUCT EXTRA RESEARCH
The general health plan brochures
you receive from your benefits office will not answer specific questions. Ask
your benefits office to find out if and exactly how a plan will cover your special
needs. Ask to get a copy of the "evidence of coverage" from your benefits
office or the plan itself to determine whether you’re covered. Find out before
you sign up.
HMO OR PPO?
If your employer offers you a choice
between a Health Maintenance Organization (HMO) and a preferred provider organization
(PPO), you need to figure out which type of plan best meets your needs. However,
these days HMOs and PPOs are looking more and more alike. Generally, a PPO allows
you more choice in seeing a doctor, but at a higher cost. You may have an annual
deductible you must pay before the PPO begins to pay for any claims. An HMO
may have lower copayments and premiums, but may restrict your freedom to choose
a doctor (such as a specialist) by requiring you to first obtain a referral
from a primary care doctor.
A recent Consumer Reports
survey of 83,000 readers found that the main problem for consumers with PPOs
was billing, especially when going out of network for care. For HMOs, the survey
found the main problem to be obtaining needed care and choosing doctors. Here
are some things to keep in mind when choosing between an HMO and a PPO:
- Consider the financial tradeoffs
between PPOs and HMOs. Is the freedom to go to any provider worth the additional
out-of-pocket expense you may have in loosely managed care? Consumers Union’s
reader survey suggests that it may not be. The difference in premiums may
be small, but when you factor in the coinsurance and potential billing problems
in a PPO, you may be financially better off in an HMO.
- If you are in poor health, consider
that PPOs have fewer restrictions on care. Consumers Union’s readers survey
revealed that respondents with serious health problems had less trouble getting
needed care and seeing doctors in PPOs. Another option is an HMO with a point-of-service
plan. Often such plans allow you to refer to specialists in or out of the
- Know the benefits each plan will
provide. It may be that the services you need such as mental-health benefits,
coverage for your children’s immunizations, or management of a chronic condition
you have, are covered in an HMO but not in a PPO. Or an HMO may not provide
out-of-area coverage for a child away at college, but a PPO will. Many disputes
later arise because employees fail to understand their benefits.
- Decide which restrictions on access
to care you are willing to accept. Ask about rules for referrals to specialists,
preauthorization for certain procedures, and preauthorization before going
to the hospital.
TAKE A GOOD LOOK AT YOUR FINANCES
Don’t choose a plan with high out-of-pocket
expenses if you can’t pay for them. If possible, pick a plan that will provide
you the services you need at a price you can realistically afford.
HMO ENROLLEES SHOULD ALSO ASSESS
THEIR MEDICAL GROUP
HMOs (except for Kaiser) must contract
with groups of doctors to provide care to their enrollees. In the past few years,
several medical groups have gone insolvent and have not been able to provide
care to HMO enrollees. When that happens, the HMO must find other doctors to
take care of enrollees. To avoid any disruptions in your ability to see a familiar
doctor, you should get more information from your benefits office and the HMO
about the financial stability of the medical group that provides care to that
Once you’ve assessed your needs and
resources,collect information on the plans and their medical groups
- Gather information from your employer’s
benefits counselor. Ask your doctor about the plan you’re considering.
- In California, you may get additional
information about health plans from two different agencies, depending on the
type of plan you are considering. The Department of Managed Healthcare (DMHC)
oversees the state’s HMO plans, which are the majority of California plans.
The Department of Insurance oversees the state’s indemnity plans, such as
traditional insurance and PPOs. The DMHC recently issued its first HMO Report
Card, which is available on their website at www.hmohelp.ca.gov or by calling
916-324-8176. You can also find the DMHC’s record of consumer complaints for
the plans you are considering on its website. You may contact the Department
of Insurance Consumer Services at (800) 927-4357.
- Other information on choosing
a plan is available from the Pacific Business Group on Health (PBGH), at 415-281-8660
or on their web site at: www.healthscope.org
or the Public Employees Retirement System on their web site at: www.calpers.ca.gov.
The PBGH website also contains HMO report cards.
- Check out possible out-of-pocket
expenses. When you consider a point-of-service (POS) plan (an HMO with an
option to go to an out-of-plan doctor), see what portion of a doctor’s fees
the plan will pay. Although rates for these POS plans are higher, it is a
valuable option that Consumers Union recommends.
- Ask the plans you are considering
about specialists. How easy is it for your primary care doctor to give referrals
to specialists? Ask each HMO you’re considering to give you a list of specialists.
Determine whether you like the lists, or whether the plans are lacking in
a specialty you might really need.
- If you choose an HMO, you must
also choose a primary care physician. For most HMOs, your selection will assign
you to a particular medical group. Be sure you understand the rules of the
group, especially regarding choice of hospitals and specialists. You are probably
limited to specialists within the medical group.
- Ask the plans whether they have
experienced major changes in the medical groups providing care to their enrollees,
or in the numbers of doctors or networks included. Be sure that the doctors
you like are accepting new patients. Ask the plans about the financial stability
of the medical groups. You may also want to contact a medical group to ask
questions about its financial health. The DMHC website (www.hmohelp.ca.gov)
includes information on the financial condition of every medical group in
the state. This information also can be obtained by contacting the agency
at 916-324-8176 for those without online access.
- Ask the plans about coverage for
medication and chronic conditions. If you are currently on medication, will
the plan you’re considering approve the regimen you’re on? If you suffer from
a chronic condition such as asthma or diabetes, what kinds of outreach and
monitoring does the plan have?
- Ask the plan about its accreditation.
Find out whether the plan has been accredited by the National Committee for
Quality Assurance (NCQA.) [Web site: www.ncqa.org]. However, be aware the
NCQA uses data that has been collected by the plans themselves, so while their
information can be a guide, accreditation is not a guarantee of excellence.
IF YOU’VE ALREADY
ENROLLED IN A MANAGED CARE PLAN
- Be prepared to speak up and write
letters to advocate for proper care.
- Be ready to switch doctors. If you’re
unhappy with your care or you don’t like the doctor, most plans make it reasonably
easy to switch.
- Prepare an escape fund. You may
need to use services outside the plan if you can’t get the care you need with
the plan. If your health is at stake, financial constraints shouldn’t keep you
from doing what you must.
- Be a squeaky wheel. Complain to
the HMO when you don’t get a referral or an appointment that you think you
need. Learn about the plan’s grievance procedure and, if necessary, use it.
- If you’re enrolled through your
employer, complain to the benefits manager if you’re unhappy with the plan.
Some employers have strong purchasing power.
- If you’re not satisfied with your
HMO in California, call the DMHC’s HMO Help Center at (888) HMO-2219. To lodge
a complaint about a PPO, call the Department of Insurance at (800) 927-4357.
In its October 2001 issue, Consumer
Reports magazine rated HMOs throughout the country, based on survey data
from 83,000 subscribers. Copies of that study are available online at www.consumerreports.org
or by calling 1-800-766-9988 and requesting reprint #9876. News media can receive
copies by contacting Michael McCauley at 415-431-6747.
Consumers Union also rated Medicare
HMOs in a recent report titled "Guide to California Medicare HMOs."
To order free copies of this report, call 888-430-2423. The report may also
be viewed online at www.consumerreports.org or www.chcf.org.
Consumers Union, publisher
of Consumer Reports, is an independent, nonprofit testing and information
organization, serving only the consumer. We are a comprehensive source of
unbiased advice about products and services, personal finance, health, nutrition,
and other consumer concerns. Since 1936, our mission has been to test products,
inform the public, and protect consumers.