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Health Care Reform:

Health Insurance & Affordable Care Act

HMO, PPO, EPO: What Health Plan Is Best?

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This year, HMOs and PPOs dominated the plans offered by insurers on the health insurance exchanges. According to an analysis of plans sold in the 36 states for which the federal government runs the online insurance marketplace as well as the plans sold on the California exchange, HMO offerings made up 40 percent and PPOs another 40 percent. POS plans made up 12 percent and EPO plans 7 percent. 

Pearson says the explanation may be that insurers anticipated that people who bought a PPO would probably want to use out-of-network providers. Since out-of-network spending doesn’t count toward the out-of-pocket maximum that people are responsible for before insurance picks up the full tab, these people were likely to be cheaper to insure, she says. (Next year, the out-of-pocket maximum will be $6,600 for single coverage and $13,200 for a family plan.)

Based on the 18 states that have released their proposed products and rates for next year, it doesn’t appear that plan types are likely to change significantly, says Shubham Singhal, leader of the health care practice at management consultant McKinsey & Co.

“Perhaps a few more EPOs will emerge,” he says. “Some of the health plans that might have introduced metal-level plans through the HMO are viewing the EPO as way to introduce a non-gatekeeper product.”

Since you can’t rely on plan type to provide clear guidance on out-of-network coverage, there are three basic questions to investigate when evaluating a plan, says Pearson:

  • Is there out-of-network coverage?
  • Does that out-of-network spending accrue toward the member’s out-of-pocket maximum? Legally it doesn’t have to, but some plans include it.
  • Do members need a primary care physician gatekeeper?

That’s only the beginning. Once you figure out whether a plan covers out-of-network care, it can be difficult to find out whether your doctor is even in that plan. You can check with your doctor’s office, but sometimes they don’t know. You can also look at provider directories to see who is and isn’t in a plan’s network; however, that information frequently proved inadequate or inaccurate last open enrollment period. But understanding the alphabet soup of plan types is an important first step. 

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Fri, Aug 15 2014

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