Ask The Health Insurance Specialist

QUESTION:

Question from Gina: My sister has a PPO Advantage Plan that is $100 per month less than my Supplement. I’m considering enrolling in the same plan during AEP (Annual Election Period) because she says she can go to any doctor or hospital in the country, the same as I can with my Supplement. Is that true?

ANSWER:

It’s not true. There is so much confusion when it comes to PPO’s, how they work, and how they differ from HMO’s. Let’s get into it.

PPO, which stands for Preferred Provider Organization, does not mean those who have them can simply make an appointment at an out of state or area provider, show up and expect everything to work the same as if they were at a local doctor or hospital. PPOs still have networks. When you leave the network, what you pay for services, especially surgeries or inpatient hospitalizations can be exorbitant. With most PPO plans, members can be responsible for 30% to 45% of the billable amount of services provided out of network vs a $200 to $350 co-pay at an in-network doctor or hospital with their MOOP increasing to over $10,000. There are a couple of PPO plans that have much better cost sharing for out of network services, however, with the number of plans now offered in Western PA exceeding 100, they can be hard to find.

And here are a couple of things that are almost never explained: # 1) Out of Network providers are not required to accept PPOs and it’s not uncommon for them to deny services unless they’re paid in full up front. The Mayo Clinic, one of the top health systems in the country, has expanded operations into several states and does not take PPO’s that are sold outside of the state or area where they have facilities. #2) When using an out of network provider, be that for an emergency or elective procedure, they can “balance bill.” This is what happens when the provider is reimbursed by a patient’s PPO less than what they are normally paid by other local plans. You see, when you’re out of network, the PPO only pays as if the services had been rendered at an innetwork vacility. For example, someone with a PPO, or HMO for that matter, is on vacation. He has emergency quadruple bypass surgery, an inpatient procedure requiring an average hospital stay of three to five days. All-encompassing, let’s say it’s generally reimbursed at $150,000 to an in-network hospital. However, the out of network hospital it was performed at is normally reimbursed $175,000. The out of network provider has the right to bill the patient for the $25,000 difference. Now, there are a select few PPO plans that have a national network which can eliminate balance billing and ensure that the majority of hospitals and doctors throughout the country are in network. But again, most PPOs don’t provide this freedom. In addition, too many agents don’t understand these nuances and give people a false sense of security about PPO’s.

Only Medicare Supplements provide a guarantee that practically any doctor, and every full- service nonVA Hospital in the country can be used without the possibility of being charged extra or denied elective services. As great as our two large local health systems are, I can’t count the number of people and clients I’ve met who’ve had lifesaving surgeries or treatments at the Mayo or Cleveland Clinics, John Hopkins, and MD Anderson Cancer Center.

Advantage Plans provide excellent value right now with the combination of low premiums, reduced copays, and the valuable packages of ancillary benefits like dental, vision, hearing, OTC, and much more that are now offered. We’re helping people every day make the transition from Supplements to Advantage Plans. But please. DON’T MAKE THAT MOVE WITHOUT CONSULTING AN AGENT OF THE HEALTH INSURANCE STORE FIRST! It’s not in everyone’s best interest! It can actually be more costly, and the move irreversible. If you use another agent or agency and let them know you are interested in moving from a Supplement to an Advantage Plan and they don’t stand to get a commission unless they enroll you in one, they may only sell you on the fun stuff about HMOs or PPOs; the premium savings, dental, gym membership, etc. There are some trap doors and risks that must be explained as well as other factors to consider. We often advise people against leaving their Supplement.

HMO stands for Health Maintenance Organization, which is a bit of an antiquated term because referrals are not needed to see an in-network specialist. Most, but not all, companies supply access to virtually every doctor and all Western PA hospitals. Western PA HMOs, in gerneral, tend to have lower MOOPs and co-pays than their PPO counterparts. Balance billing for emergency services with both types of Advantage Plans can occur, so HMOs are often the better value, although many people are starting to enroll in the one PPO plan that has a higher MOOP for the tradeoff of getting a nationwide network along with some of the lowest co-pays and one of the best ancillary benefit packages available.

If you would like to benefit make a no cost appointment to go over plans side by side, have an in-depth discussion about moving from a Supplement to an Advantage Plan, or want more information on the PPOs with a nationwide network, give us a call. For those who aren’t sure they want or need an appointment, feel free to reach out and have a brief discussion with a licensed agent. It’s quite possible we can advise you over the phone that your current plan is good for next year. You can also contact me personally via email at aaron@getyourbestplan.com.