So how about plans without all those tiers? Carol ruled out HMOs, with their restrictive provider networks, as well as “bronze” plans, which would cover only 60 percent of her medical bills. She looked at something called the Personal Choice PPO Silver, with a premium of $695, but had a hard time figuring out what her total costs would be.
The sheet sent by the Blue Cross rep listed copays of $30 for primary care doctors, $70 for specialists, and $10 for generic drugs. But only some of the details about the plan’s high coinsurance rates were listed on the sheet. Further website research showed she’d have to pay 30 percent after the deductible for outpatient surgery and routine radiology services, for example, if she stayed in the network. The coinsurance would be 50 percent if she went out of network. (As we’ve pointed out, high coinsurance amounts are becoming the norm, and consumers continue to confuse smaller copays with the larger coinsurance costs.)
Carol understood the deductible, though. It was $2,000 in network and, according to the website, a whopping $10,000 if she went out of network. (The reform law’s limits on out-of-pocket spending generally don’t apply to out-of-network expenses.) “That’s crazy,” she said. “By the time I pay that, the year will be up.” She had just met the reality of today’s health insurance market—many policies these days are akin to catastrophic insurance, meaning policyholders pay most of their bills out-of-pocket before insurance kicks in. “I was so turned off by the deductible, I exited out,” she told me.
The process had been exhausting, time-consuming, and confusing—and she wasn’t close to done yet. But at least Carol was making some progress in figuring out which plans didn’t work for her, and avoiding pitfalls by paying close attention to the fine print.
Consumer-oriented coverage can help people through that process. And since the rollout of the insurance exchanges, a couple of the leading local news outlets in Carol’s area—the Philadelphia Inquirer (going through a tumultuous period) and Philly.com—have offered some of that sort of coverage. On Oct. 21, Inquirer reporter Harold Brubaker delivered a strong story about a local man, Lee Koff, who’d been dumbfounded to receive a bill for more than $6,000 after a new defibrillator implant; in 2010, a similar procedure had left him with out-of-pocket costs of $81. The difference? A coinsurance provision applied when Koff’s plan was his changed by his insurer.
Koff is an 87-year-old with Medicare Advantage plan, so he’s not shopping on the new insurance exchanges. But his experience, as described by Brubaker, is relevant to consumers throughout the insurance marketplace (that’s an important point for reporters: the lessons about digging into the fine print are often the same, no matter what sort of plan you’re shopping for). From the article:
“The thing I looked for when I got the notification is, how much more is the premium. It went from $146 a month to $175.80,” Koff said.
Coinsurance is the piece that caused Koff’s $6,100 bill, but that change escaped him. “I think I’m pretty alert, but I didn’t read every word” of the plan description, he said.
Just this week, Philly.com republished a good piece by ProPublica’s Charles Ornstein about the coming “second rate shock”: many consumers’ discovery that what look like affordable premiums on the new exchanges will come with higher deductibles, copays, and coinsurance than they’re accustomed to. Larry Levitt of the Kaiser Family Foundation said this to Ornstein:
“I think it remains to be seen whether people see these plans as offering them good protection against catastrophic health expenses — which they do — or are disappointed that they won’t generally provide much coverage for occasional visits to the doctor or prescriptions.”