by Guest » Tue Mar 03, 2009 05:04 am
Hi All!
It seems that there are plenty of learned people available in this community. I’m glad that I’ve found you. :D
I was all decided to buy health coverage before I was struck by the options available to me. I didn’t know that so many things you have to learn to choose the right coverage. :shock: And, therefore I’m here. I’d like to ask a very stupid question to y’all.
What are the differences and similarities between HMO and PPO plans?
Curious_kid
It seems that there are plenty of learned people available in this community. I’m glad that I’ve found you. :D
I was all decided to buy health coverage before I was struck by the options available to me. I didn’t know that so many things you have to learn to choose the right coverage. :shock: And, therefore I’m here. I’d like to ask a very stupid question to y’all.
What are the differences and similarities between HMO and PPO plans?
Curious_kid
Posted: Sun Nov 21, 2010 03:26 am Post Subject:
However, the cost shares such as the deductible and coinsurance will usually be the same when one gets emergency care outside of the network.
This may be true, but the trump card is the "USUAL, CUSTOMARY, and REASONABLE" language inserted in almost every contract. If the insurance company does not consider the expense usual, customary or reasonable, it will apply its own standards to the payment of the claim (at the agreed percentages following any copayment or deductible or both). This typically leaves expenses uncovered and the responsibility of the patient. Out-of-network deductibles are almost always higher than in-network deductibles, emergency or not -- they can be as much as 100% more.
EXAMPLE: Emergency room visit in-network. Hospital bills $650 for ER, $250 for labs, $300 for X-rays. $1200 total bill. PPO negotiated rate: $200 for ER, $50 for labs, $50 for x-rays, total compensation: $300. Plus patient's $50 copay for ER without hospital admission. Patient has 70/30 coinsurance, so in addition to the copay, PPO pays $210 to the hospital, patient owes $90 (assumes no deductible applies).
Emergency room visit out-of-network: Hospital bills $850 for the ER, $300 for labs, $350 for x-rays, $1500 total bill. PPO evaluates bill according to UCR, and pays 70% of $1200 (based on its typical billings as above), leaving 30% of $1200 to the patient ($360) PLUS ALL OF THE UNCOVERED EXPENSES, $300. Patient owes the out-of-network hospital $660. (( If the patient has good negotiating skills, and cash, he can probably get a 30% discount by paying in full. ))
Sure, the copay and coinsurance percentages are the same, but the out-of-pocket expense is not. That's the part people are least likely to understand and the most likely to complain about.
So be careful when you state the copays and coinsurance percentages are the same. It's only part of the discussion. It the unexplained "OOPs" factor that gets agents and insurers on the bad side of the insured.[/quote]
Posted: Sun Nov 21, 2010 03:35 am Post Subject:
And I should also add, there will be an even bigger discrepancy between in-network and out-of-network expenses for HMO subscribers.
EXAMPLE: In-network ER visit, as above $1200. Subscriber pays $50 copayment. $0 balance owed (no coinsurance in the HMO in-network).
Out-of-network ER visit, as above $1500. Subscriber pays $50 copay. HMO pays $300, its "usual and customary" ER reimbursement. Subscriber is exposed to $1200 balance, as compared to the $660 owed by the PPO subscriber. Only if the HMO has a coinsurance provision for out-of-network emergency care will the loss exposure be roughly equivalent.
In a smaller state such as Connecticut, I suppose things might be a bit more equitable, and costs for hospitals in the state and near the border in the neighboring states might not have the disparities seen in most other parts of the country. But the expenses in Connecticut are also probably higher than they are here in Southern California, where we have a younger, more diverse, and larger population, and where we have many more hospitals and physicians available, which also mitigates against higher expenses.
I can make that assumption knowing that Connecticut has the highest average cost of Long Term Care in the nation, excluding Alaska.
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