This is a lightly edited post from December 2013:
The health insurance company triple slash of plan design, deductible amount and out of pocket max is also an obsolete view of the qualities of an insurance plan. PPO 2500/5000 was useful shorthand to describer a plan’s basic contours a decade ago. However that short-hand is still limited as it did not indicate whether or not mental health coverage was provided, it did not indicate what type of prescription drug coverage was included and it did not indicate how many physical therapy appointments I could make a year. But it was a useful shorthand.
Things have gotten complicated in the past decade. The first round of complication was the proliferation of high deductible health plans and their attendant health savings accounts. This was a single add on so an HDHP PPO 2000/4000 was still comprehensible and reasonably straight forward as deductible applied to the well baby visit as well as the emergency room visit.
Now,the insurance triple slash is almost useless and a new language needs to be developed. How do we desciber a HIA HSA embedded deductible limited network PPO with non-cost share EHB 2000/4000 in a manner that makes any sense to a consumer at a glance?
PPACA has made the landscape far more cluttered. The major changes from PPACA is the creation of non-cost sharing preventivebenefits which includes contraceptives, vaccinations, annual PCP and ObGyn check-ups, pediatric dental and basic screenings for a number of chronic diseases. The second major change is the nature of deductibles and out of pocket maxes. Previously prescription drugs and dental/vision services tended to have their own counters seperate from the medical out of pocket dollar counters. Now all medical costs for prescription, major medical and essential health benefit vision/dental are blended together into a single out of pocket dollar counter. This change is not as descriptively disruptive as the creation of the non-cost sharing services.
Non-cost sharing preventative services are the major change as it is quite plausible for a person to use, in the first week a policy is active, $978.24 in contracted rate services (what the insurance company pays out) and have a total of $33.18 apply to deductible and out of pocket maximums. This is a good thing if a person gets a number of catch-up vaccinations, an annual PCP and OBGyn visit and several screenings performed. It should improve their long run health and decrease long run system cost, but the language of plan design, deductible, out of pocket max fails.
This is a problem because the short hand applied to both Exchange plans and group sponsored plans implicitly discourages utilization of the non-cost sharing but high value added services as it implies that all services are cost shared services. This is most notable on Bronze plans where the argument (rightly in my mind) is a $5800 deductible is a massive incentive against either buying insurance in general OR using it for anything short of getting hit by a bus is strong but misleading because that deductible only applies to cost shared services and not the preventative services.
I’m not sure how to fix this problem.
currants
Or even, how do we write that sentence in a manner that allows a blog reader to know what we’re trying to make sense of?
Just (sort of) kidding. There are four acronym- and two number-codes in that sentence, and those things are short-hand for folks who work with them routinely, but that short-hand rapidly becomes incomprehensible to most of us.
It’s a good reminder to me how a shortcut that helps me say something to colleagues in a more efficient fashion simultaneously excludes other listeners (whether I intend to or not).
I love your posts, Richard–thanks again. I spent a year (2010-2011) working on an analysis of the then-new ACA for impacts on elder/poor in my state, and have very much appreciated your highly informative work. (Also the referee posts!)
Richard mayhew
@currants: yep that line was supposed to be impenetrable
NotMax
Ugh.
Also indicative of emanating from the jargon-prone. Unless there is a specific and pressing reason, use preventive.
rikyrah
thanks for the info
Keith P.
From the headline I was expecting a story about Spock and Kirk and Sulu and Scotty all having sex with each other.
Richard mayhew
@Keith P.: I don’t want to know what your fanfic is like ….
Mnemosyne (tablet)
I’m debating which plan to pick at work this year — since prices have gone up a bit, the PPO and HMO plans are basically the same cost. The HMO has much lower out-of-pocket costs, but there is NO coverage for out of network, which gives me a little pause.
ArchTeryx
@Mnemosyne (tablet): I’d say it depends on how much you expect to use out of network doctors – are the ones you normally see in the network or out (takes a little phone work but usually you quickly can find this out). PPO networks generally are much wider, though; you’re far less likely to get hit with surprise out of network charges, say, from an anesthesiologist because he’s out of network while the rest of the surgical team is in-network. They’re also far less likely to limit you to one hospital in the area.
Being as how I have chronic conditions to manage, PPOs are the winner going away for me, but that’s my situation.
BC
I have an adult son on my insurance who will age out at the end of the month.
He has preexisting conditions that require medication and regular doctor visits. He has been hospitalized twice in the last 3 years.
I am worried that if he chooses ACA and the Republicans destroy it, then he will be stuck with no insurance. On the other hand, the COBRA option is pretty expensive, and time limited. If the Republicans come up with some plan that current ACA subscribers can keep it, but limit the options for new subscribers, then he could be screwed by that choice also.
I hate that health care is so idiotic in this country. In the last 10 years, I’ve lost MIL, both parents and my husband after long illnesses. Dealing with the health care industry through all this made emotionally difficult times many, many times worst.
What would you do in our shoes? (We live in Maryland, by the way, which is all onboard with ACA)
Fr33d0m
I could be in dense mode but I read that and thought I had entered in the middle of some conversation about something.
Richard Mayhew
@BC:
Let’s lay out some facts.
a) COBRA expires after 18 months and there is no subsidy so it is highly likely to be expensive.
b) PPACA probably will subsidize your son.
c) Coverage effective date for a PPACA policy is 1/1/16.
d) Earliest date Republicans could wreck PPACA 1/21/17
Going PPACA (especially if subsidized) over COBRA is definately a no-brainer for 2016 and a highly likely good choice in 2017.
BC
Thanks for the response Richard. I guess I hadn’t thought through that ACA is probably ok up to the next administration.
I thought that ACA also allows for “life changes” so that he can pick it up this month as he loses the other insurance. If not, then we will probably do COBRA through the end of the year and then he can switch.
I have been reading your posts and they are extremely helpful. Please keep them up.
Luthe
Do you have any thoughts on mental health co-pays vs. PCP co-pays? I’m asking because I scheduled six weeks of therapy appointments today at $30 a pop. I mean, it’s nice they have to cover mental health and can’t charge more than the PCP co-pay for visits, but there’s something a little off about the pay and incentive structure for it.
I know the PCP co-pay is to keep people from running to the doctor for every little sniffle, but it seems counterproductive for mental health. I can’t really think of a condition that would have me in my PCP’s office once a week for valid reasons. Those $30 visits add up (but not enough to hit the deductible, *sigh*). For someone forced to choose between mental health care and paying bills, that’s $120 worth of disincentive every month. So, thoughts on altering the cost structure to increase mental health utilization?
Richard mayhew
@BC: if he currently has qualified coverage and loses it, he can sign up for an ACA exchange policy effective 11/1/15, so you should save on Cobra premiums. Search the blog for a couple of posts on the Cobra free option for a way to save a few bucks while still being effectively covered until the exchange policy kicks in
mclaren
I am.
Nationalized single-payer health care.
All 7 paragraphs of your turgid acronym-laden gobbledygook can be boiled down to 5 words: nationalized single-payer health care.
Richard Mayhew
@mclaren: Okay, does that help anyone who has an open enrollment meting next week, next month, next year, next Olympiad, next decade, next generation?
BC
@Luthe: Be thankful that you only have to pay the co-pay. I have had extended family members require extensive mental health therapy (severe mental illness such as schizophrenia runs in my husband’s family) and, in the old days, you had to fight for more than a few weeks of therapy. And after those few weeks were up, re-fight for a few more. They never would okay more than 6-9 weeks of therapy at a time. And, there were yearly caps that were well short of a full year of weekly visits.
When therapy is critical to survival, then you end up paying out of pocket while waiting for the next okay or you hit the yearly cap. I have had years when I paid well over $10K to $15K for mental health services for these family members. These costs were not considered towards out of pocket expenses for health insurance, since mental health was considered separately.
Then Maryland passed a law that said mental health has to be treated the same as all other conditions. Life is so much better now.
Also – there are plenty of conditions that require weekly or near-weekly visits to some doctor or other. In taking care of 4 relatives over the past few years through their terminal illnesses, multiple visits to a doctor every week was the norm, not the exception. And new rules are making this even more necessary. For example, cancer patients must now show up at the doctor’s office to get refills for narcotic pain medicine, according to new Medicare rules. While I understand the point of trying to reduce narcotic pain medicine addiction and overuse, forcing those with incurable, advanced cancer in very poor shape to have to go to the doctor to get their pain medicine refilled is inhumane.
Be glad you don’t have one of the conditions that lead to constant doctor visits.