TIERS OF CONFUSION…LIMITED UNDERSTANDABILITY…NETWORK PLANS
As part of the health industry’s movement toward greater cost-consciousness, tiered and limited network health plans are on the rise and confusing patients and physicians alike.
These plans known as tiered or limited network plans, require a deductible if a member wishes to be treated at these designated high cost facilities. The purpose of the plans is to drive members to the lower cost facilities; however, members can choose the higher cost facilities if they agree to pay the associated deductible amount for these providers.
Typically, the deductibles for these plans can range from $500 to $2,000 per visit. These plans are different from the high deductible plans that have been available for a number of years. The high deductible plans affect all covered members and impose an upfront deductible amount before co-payment amounts kick-on. Such plans have lower premium amounts as compared to typical lower co-pay plans; however, they do not provide the consumer with a choice of reducing their out-of-pocket cost by choosing a lower cost provider.
With the implementation of National Healthcare Reform, there is increased pressure on the insurance companies to help reduce the costs. These tiered and limited network plans are designed to put the employers and employees in the game with the insurance companies – to help lower costs. We will most likely see an increased participation in these types of plans in the coming years as a means to help control costs. (Source)
In Massachusetts, tiered and limited network plans now make up 15 percent of the health insurance market, a figure industry leaders expect to grow during the next two years, The Boston Globe reported. As part of a recent amendment to the state’s 2006 health reform law, insurers are required to offer the plans—which either restrict a patient’s network of doctors or assign providers varying copayments based on cost and quality rankings—with premiums that are 12 percent below their standard plans. (Source)
Although this option offers patients substantial premium savings upfront, Massachusetts physician Sarah Bechta told National Public Radio’s WBUR that even she can’t determine whether a tiered plan would cost her family more in copayments and deductibles in the long run. For example, most insurers rate Boston’s Children’s Hospital as a tier 3, or high-cost hospital, to which one visit would wipe out Bechta’s $1,400 in premium savings.
“That was the thing that was really hard to predict. I could not figure it out,” Bechta said, even though, as a doctor, Bechta believes that she’s “as capable, or more capable, than everybody else who’s looking at this information.”
Even more frustrating, she said, is that every insurer uses different cost and quality measures to rank physicians, making it commonplace for physicians (herself included) to find themselves in different tiers for different health plans. Furthermore, Bechta said patients don’t understand whether they pay higher copayments for some doctors because they are better physicians or less cost-efficient.
Confusion Continues…
Massachusetts’ top three insurers say they are concerned about confusion as members get used to their new type of insurance.
“One of the things we’ve been trying to do is to make sure members know that doctors and hospitals are tiered based on quality and the efficiency of their care,” said Jonathan Chines, the director of commercial provider engagement at Tufts Health Plan.
“All of the health plans need to create easier-to-understand products with easier-to-use support tools, so that a consumer can find the knowledge we want to make available to them and use that knowledge to make health care decisions,” said Richard Weisblatt, senior vice president for provider network and product development at Harvard Pilgrim Health Care.
“Will members prefer tiered plans where there is some work on their part to figure out what their cost share is going to be for certain providers or would they rather something very simple but more limited, where the network doesn’t include every provider in the state?” asked Dana Safran, senior vice president for performance measurement and improvement at Blue Cross Blue Shield of Massachusetts.
Insurers say a growing number of employers are offering tiered insurance plans because they are the best way to lower premiums while still giving consumers some choice in where they go for care. Limited network plans that restrict where patients go for care in exchange for lower premiums are the other option many employers are considering as they try to hold down rising health care costs. Insurers are watching the consumer response to these plans with great interest.
If the physicians and the insurance companies agree that the plans are extremely difficult to understand…just what response do they believe they are going to get from patients?
(Source)
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