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.
