Courtesy Capital Financial Group Inc.
By Jason Bowman
If you are like most people who find choosing a health plan confusing and stressful, rest assured that a little homework can help make the decision process easier.
When it comes to insurance, unfamiliarity can lead to choices that may not suit you best. But the good news is you get a “do-over” annually during open enrollment.
A good place to start is understanding common health insurance-related terms, such as the “metal” levels of bronze, silver, gold and platinum. It kind of sounds like the Olympics, minus all the excitement.
The idea behind these descriptions is to give you, as the prospective insured, an idea of how costs will be shared between you and your insurer. You will receive the same standard health services regardless of the level, but your cost-share will vary depending on which level you select.
Bronze level means 60 percent is the insurance carrier’s share, 40 percent is your share. Silver level is 70 percent/30 percent; gold level, 80 percent/20 percent; and platinum, 90 percent/10 percent.
To keep it simple, a bronze plan, in most cases will have the same exact network of healthcare providers and prescription drug coverage as that of a platinum plan. The noticeable difference among all levels will be the premiums and the cost of services at time of usage. Simply stated, pay less in premiums and you’ll pay more out-of-pocket at the time of service.
You will also want to consider the provider network options. Depending on the plan, there are different networks associated with them. There are three in particular you will want to be familiar with as you review your options:
HMO: You pick a primary care physician and most care is directed through the PCP. All care is rendered in-network.
EPO: You don’t need to choose a PCP. It is an in-network plan. However, they have broader networks than the HMO plans, providing access around the country.
PPO: No PCP is required and you have both in-networks and out-of-networks. PPOs tend to be costly, as they have the greatest flexibility.
You will also want to look at your prescription (Rx) coverage and costs when evaluating your options.
When looking at Rx cost, you will most likely see either a flat fixed dollar, your co-pay; a percentage amount, known as co-insurance; or maybe a combination of both. The different amounts represent the cost-share you will be responsible for depending on what tier your prescription falls in: generic, brand or specialty.
For example, if you see the Rx shown as $10/$50/50 percent (generic/brand/specialty), know that you are responsible for 50 percent of the carrier’s cost of that specialty drug. Also you will want to confirm whether or not the Rx goes toward a deductible.
As you are reviewing costs, it’s important to consider tier level of your prescription as that will ultimately drive your out-of-pocket costs. All insurance companies have their own drug formularies. These are medications chosen by doctors and pharmacists who are independent of the insurance company, known as a pharmacy and therapeutics (P&T) committee. The P&T committee develops, manages and updates the formularies.
Now that you have a better understanding of how health plans are developed, keep these things in mind when choosing a plan that is best for you: the cost of premiums, network, Rx costs and the deductible amounts. Also, ask about the out-of-pocket maximum.
You know your health and budget better than anyone and by asking a few questions regarding these specific items you should be able to make a decision that not only works well for you and your family, but will give you piece of mind if you need any major services.
Bowman is an employee benefits consultant for Capital Financial Group Inc.