October 25, 2011.
Everyone is tightening their budget belt and looking for ways to save, and for some faculty and staff, enrolling in one of UC’s lower-cost medical plans might help.
To meet the needs of its diverse workforce, UC offers eight medical plans. All of the plans offer comprehensive coverage, including behavioral health benefits. But the costs of the plans — both premiums and out-of-pocket costs — as well as provider choice and flexibility to use out-of-network doctors and hospitals vary significantly.
Kris Lange, UC’s director of vendor relations management, works closely with medical plan carriers and is an expert on the similarities and differences among the plans. We asked her for tips on choosing the right medical plan.
What are the first steps for choosing the right plan?
When choosing a medical plan, it’s important to know what’s important to you: Do you want your costs to be predictable or can you take on more risk? Do you want to choose your own specialists or do you feel comfortable having a primary care physician make these choices for you? Do you need specific services covered? Do you regularly use prescription drugs? Do you or your family members travel frequently and need coverage away from home?
Once you’ve thought about what’s important, use the Medical Plan Chooser on the At Your Service website to understand the cost of each plan and what it covers. Also, information on the plans’ websites can help you identify each plan’s participating doctors and its prescription formulary.
Last, look beyond the monthly premium. While the premium is predictable, the full cost of the plan will depend on what you pay for services and prescriptions after the plan pays.
We’ve developed two examples that illustrate those additional costs: One scenario shows a person with no dependents and relatively low use of her medical plan; the second example is a family with high medical needs. You can see from these charts that premiums are only part of the cost equation. Staff should compare the total cost of medical care for all of our plans.
Health Net Blue & Gold, Health Net HMO, Kaiser and Western Health Advantage are all health maintenance organizations (HMO), but they have different costs. What are the differences among them?
In some ways they are all similar. All HMOs require you to choose a primary care physician (PCP) from the plan’s network of providers. The PCP coordinates all of your care. If you want to see a specialist, you must have a referral from your PCP. The HMO covers your expenses only if your PCP has authorized the services, unless it’s an emergency — that means it may not be the best choice for you if you travel a lot or spend periods of time away from your PCP’s immediate service area.
With all of UC’s HMO plans, there is a small copay for office visits, hospital stays and prescription drugs, but most other services have no charge. That means your out-of-pocket costs are limited. All of these plans are good choices for those who are comfortable with the HMO model.
Our HMO plans differ in their networks. Health Net Blue & Gold and Health Net HMO are exactly the same plan except for their network of providers. The Health Net Blue & Gold network includes only the most reasonably priced providers — including all of UC’s medical centers — while the Health Net HMO has a wider network of doctors and hospitals.
Kaiser is different from the Health Net plans in that it has an integrated network. Your primary care physician, pharmacist and specialists are all Kaiser employees, and they coordinate your care through your electronic health record.
Western Health Advantage (WHA) is a regional HMO network of medical groups, doctors and hospitals in the Davis/Sacramento area. Its network of providers works much like those of the Health Net plans, and includes the UC Davis Medical Center and doctors. WHA has a unique Advantage Referral Program that allows for specialty care from any WHA specialist — not just those from your primary medical group.
The other difference among these plans is the premium cost. Health Net Blue & Gold, Kaiser and WHA are three of our lower-cost plans, while the Health Net HMO costs more because it offers a wider choice of doctors, hospitals and specialists.
Anthem Blue Cross PPO and Anthem Lumenos PPO with HRA are both PPOs. And isn’t UC’s Core plan also a PPO? First, what is a PPO? What’s the difference between these plans?
PPO stands for preferred provider network, which is a group of doctors and hospitals that have contracted with the insurance plan to offer services at a discounted rate.
PPO plans are similar in that you can choose any doctor or hospital, but you pay less if you choose a doctor in Anthem’s nationwide PPO network. With a PPO, you don’t need a referral from your primary care doctor to see a specialist. And if you live outside of the U.S., all three of these plans provide enhanced in-network coverage for foreign providers.
The coverage provided by the plans is generally the same, except for prescription drugs. That’s because with the PPO, prescriptions are provided for a flat-dollar copay, whereas with the Lumenos plan and Core plan, you pay 20 percent of the total cost of prescriptions.
All the PPO plans have deductibles, but the Anthem Lumenos plan has a higher deductible and the Core plan has a MUCH higher deductible. We sometimes refer to Core as catastrophic coverage since the plan won’t pay until you meet a $3,000 deductible, making it unattractive to most UC staff, even though UC pays the full cost of Core. Still . . . if you’re healthy or want to “self insure” your costs in exchange for a very inexpensive plan, it is an option. Just make sure you can pay the deductible if something catastrophic does happen.
The nice thing about the Lumenos plan is that it comes with a UC-funded Health Reimbursement Account (HRA), which you use to pay part of your deductible. That means you pay nothing for services and expenses until you use up the HRA; then you pay the full cost of services until you meet the deductible.
Lumenos sounds interesting – but is it complicated?
The Lumenos Plan is really no more complicated than a regular PPO, but you should be willing to actively manage your costs, and Anthem provides online tools to help you do that. And you have to be prepared to pay higher out-of-pocket costs if you use up your HRA. On the other hand, if you don’t use up the HRA, your out-of-pocket costs are zero. Plus, any unused balance rolls over to next year.
We’ve done a head-to-head comparison of Anthem Lumenos and Anthem Blue Cross PPO, looking at the combined cost of monthly premiums and out-of-pocket costs. Our comparison shows that most faculty and staff would pay less overall under the Anthem Lumenos plan than the Anthem Blue Cross PPO. In general, only single employees with very high claim costs and employees with high prescription costs fare better under Anthem Blue Cross PPO.
That leaves the Anthem Blue Cross PLUS. How does that plan compare to the other plans?
If you like the concept of an HMO, but also want the flexibility of PPO, Anthem Blue Cross PLUS may be the one for you. It has features of both HMOs and PPOs. Like an HMO, you have a primary care physician who manages your care and makes referrals to specialists — your costs are limited to copays when you use providers referred through your PCP. But you also have access to PPO network providers, as well as out-of-network providers, as you would in a PPO. You pay a higher monthly premium to get that access, and your cost for out-of-network services is higher.
Do you have any final words of advice about choosing a plan?
All of UC’s medical plans are very good; there are no bad choices. They all offer preventive care at no cost, comprehensive benefits — including medical, hospital, behavioral health, and prescription drug coverage — and access to excellent doctors and hospitals. The copayments or percentage of coinsurance are lower than many plans offered by other employers. But the bottom line is that if the plan fits your needs, then you’ve made the right choice.