(Shhh, I'm hunting wabbits. Well, health insurance plans, but still . . .)
It’s October, the traditional kickoff of Open Season, a time when both employers and the government present health insurance plans for the following calendar year. The period given to make a choice is short, sometimes just a week or two in the private sector. The enrollment period for plans under the Affordable Care Act (ACA or Obamacare) this year is November 1, 2017 through December 15, 2017.
Despite the long enrollment period for ACA plans, be careful when procrastinating this year. In an effort to depress enrollment in ACA plans, the Trump Administration has instructed the Department of Health and Human Services to allow the Healthcare.gov website to nurse its weekly hangover on every Sunday of the period, except the last one, December 10th. The site will be shut down from 12 a.m. to 12 p.m. on those days. For those of you who don’t procrastinate, the site will also be unavailable on the first night of the period, November 1st.
These deadlines are important to remember. If you miss the deadline for either private or public enrollment, you can’t enroll in a health insurance plan unless you start a new job.
Public and private plans tend to mirror each other since the passage of the ACA. One of the biggest things they have in common is the type of plans offered. Two of the most common are the Health Maintenance Organization plans (HMOs) and Preferred Provider Organization plans (PPOs).
The main differences between the two options are coverage and cost. (Please note that the below description are generalizations. Your plan may differ in some important ways.)
HMOs
Coverage: Each insurance company has a network of doctors, hospitals, therapists, and other providers. A patient chooses a primary care doctor who is in the network. That doctor directs the patient’s care, including how much (whether they see other doctors) and by whom (which other doctors they see). If the patient needs to see a specialist, the primary care doctor has to agree that they need to and they must see someone in the network.
Costs: The insurance companies negotiate a discounted rate with their network providers, kind of like buying in bulk. If the patient wants to see a provider outside the network, the entire cost comes out of the patient’s pocket. But premiums are generally lower and co-pays are minimal, set costs ($5, $10, $20). HMOs often do not have deductibles.
PPOs
Coverage: The insurance company still has network providers, but they are larger. There is no referral necessary to see a specialist so the patient decides how much care they need and who to see. If the patient wants to see an out-of-network provider, a PPO covers the cost, at least partially.
Costs: PPOs still have negotiated rates with in-network providers, but premiums are higher. PPOs also have high deductibles and co-pays, which are a percentage of the cost of the appointment or drug. PPOs also have maximum out-of-pocket costs, which sounds good, but not when you realize that there are separate ones for in- and out-of-network costs, and may amount to several thousand dollars annually.
How to Decide
You and your family will have to consider carefully which plan is right for your needs.
- How strongly do you feel about choosing your providers? I am very picky about my providers and tend to research a provider before I go or ask for names from providers I already trust. I do not want to be told I can’t go to the best providers for me just because they are out of network, so I have always had a PPO. That does not mean that there aren’t good providers in an HMO’s network. It just means that there are fewer options.
- What kind of plan fits into your budget? I have a pretty reasonable premium, but I have two deductibles, and could end up paying $10,000 out of pocket this year.
- Are the doctors you see in your plan’s network and do you have the relationship you want with them? If it matters to you to stay with the providers you have, this may be an important factor.
- How likely are you to need one or more specialists? Many types of non-MD specialists often fall outside of network coverage: psychologists/social workers, nutritionists, chiropractors, etc.
If you want to know more about health insurance policies, check out these posts: Insurance 101, What is Health Insurance?, How Do They Figure Out What Plans to Offer and How Much They Cost?, Getting to the Bottom of What's Actually Covered
If you have questions about HMOs and PPOs, please email through the blog. I will try to answer your questions in subsequent posts.