Choosing A Health Plan - Tip Sheet 2001

CHOOSING A HEALTH PLAN

QUESTIONS TO 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 decision.

BEFORE YOU SIGN UP…

ASSESS YOUR FAMILY'S NEEDS

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 to you?

…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 coverage?

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 network.
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 HMO's enrollees.

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 Health Care (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 your regimen? 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. Individual copies of that study are available to the public at a charge of $7.75 by calling 1-800-766-9988 and requesting reprint #9876. Information on bulk reprints (10 copies or more) can be obtained by writing to Reprints and Permission, Consumers Union, 101 Truman Avenue, Yonkers, New York 10703-1057. (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.

Consumers Union West Coast Regional Office
2001

View Files Sorted By Office: Consumers Union OPI, New York - Washington DC Office
West Coast Regional Office - Southwest Regional Office - Consumer Policy Institute

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