Health insurance in Texas was turned on its head during the 2016 Open Enrollment when the state’s insurance companies dropped their Preferred Provider Network (PPO) , limiting people’s choices to Health Maintenance Organization (HMO) or Exclusive Provider Organization (EPO) – plans with more restrictive provider networks. Previously Texans had resisted these plans but changes to Open Enrollment gave them no choice. The health insurance carriers made the decision for them.
What drove the carriers to make such a radical change? Economics.
With thousands of providers and hospitals in their networks, PPO plans were too expensive for carriers to maintain, especially when the medical loss ratio (MLR) was adopted by the Affordable Care Act (ACA), which requires insurance companies to spend 80% of every premium dollar on benefits. Now, carriers needed to look at every possible option to bring the costs of policyholder benefits in line with the premiums they received.
When Open Enrollment rolls around on November 1, 2020 you will need to make an educated choice. Let us take a closer look at the two remaining options.
What is an HMO Plan?
Chances are you are familiar with an HMO’s requirement that you designate a primary care physician (PCP) and that all your requested medical services must begin with your PCP. So, if you think you need an ear, nose and throat specialist (ENT) and go directly to a specialist, even one in your HMO network, without first consulting your PCP the specialist’s services might not be covered. There is one exception: a PCP referral is not required to see an OB/GYN, and routine services such as Pap test, preventive care and annual exams will be covered by an HMO plan.
One reason insurance carriers require policyholders to visit their PCP first is because the carrier pays the doctor a monthly fee to manage the healthcare of each policyholder who designated them as their PCP. This arrangement is referred to as capitation. Capitation arrangements give providers incentive to consider the cost of treatment, which can contribute to reduced claims expense for the carrier.
Importantly, with an HMO, the carrier won’t pay benefits for services given by an out-of-network provider unless there’s an emergency. Insurers define “emergency” as a potential loss of life or limb. So while a 5 year-old’s ear infection at 3 a.m. is an emergency to the parents, a visit to the emergency room won’t be covered by an HMO.
And it gets more complicated. Let’s say you go to a doctor you know isn’t in your HMO network because the doctor has treated you for years, and you’re willing to pay them directly for their services. The doctor writes you a prescription and you fill it at a pharmacy in your HMO network. The prescription won’t be covered because the doctor who wrote it wasn’t in your HMO network. The same benefit decision applies to lab services or imaging services such as x-rays or CAT scans
What is an EPO Plan?
An EPO plan is a hybrid with aspects of PPO and HMO plans. With an EPO you do not need to have designate a PCP nor do you need a referral to see a specialist. So in that respect, an EPO looks more like a PPO.
Yet like an HMO, an EPO plan does not offer out-of-network benefits unless there is an emergency, and the carrier’s definition of “emergency” is the same. Also, EPO networks are as restrictive as HMO networks. The ultimate goal is to reduce claims expense, and medical costs are more tightly managed under these plans than with a PPO plan.
The Message: Know Your Network!
As a policyholder, you must always be aware of the network participation of your doctors, laboratories, hospitals, imaging centers, and pharmacies
Most important is that you know what type of coverage your carrier is offering before you enroll.
If you have a longstanding relationship with a physician you want to confirm that your physician accepts either the HMO or EPO plan you’re enrolling in. If you need specialists, you want to know how many specialists in that field you may choose from. If a carrier indicates 20 cardiologists and another carrier shows 10 cardiologists that’s an important indicator of how many choices you’ll have. Also, identify the network participation of the hospitals in your area. Hospital options are more limited under HMO and EPO plans than under PPO plans.
These choices are very important, especially now since you cannot make coverage changes after Open Enrollment ends December 15, 2020. If you make a bad decision, and do not qualify for a Special Enrollment Period (SEP), you can be stuck with that plan until the next Open Enrollment.
STATESIDE CAN HELP!
Stateside Insurance Services, since 2003, has focused on providing comprehensive health insurance information, responsive customer service and expert industry knowledge for Texas consumers. Stateside has annually been recognized by health insurance carriers and the Health Insurance Marketplace as a Top Producer in Texas.
Whether the health insurance policy is for an individual, family, small business or supplemental Medicare coverage, Stateside dedicates the time, and our deep industry expertise, to ensure our clients have identified the best health insurance plan for their specific needs.
Stateside is available to answer any general questions regarding your coverage options, can provide a subsidy determination, and even assist in creating and submitting online applications for ACA compliant plans during an Open Enrollment or throughout Special Enrollment periods.
By using the Telephone Appointment System, clients can take advantage of scheduling a health insurance discussion when convenient for their schedule. During Open Enrollment phone appointment availability is expanded to include extended hours and weekends.