Citing the flexibility they offer, many consumers choose health plans that provide some coverage outside the insurer’s network. Traditionally, such plans not only paid a portion of the bill, but also set an annual cap on how much policyholders paid toward out-of-network care.
An increasing number of preferred provider plans offered under the federal health law have no ceiling at all for out-of-network costs, leaving policyholders facing unlimited financial exposure, similar to what more restrictive and often less expensive types of coverage, such as health maintenance organizations offer.
Forty-five percent of the silver-level PPO plans coming to the market for the first time in 2016 provide no annual cap for policyholders’ out-of-network costs, an analysis by the Robert Wood Johnson Foundation found. Not having a cap could lead to tens of thousands of dollars in bills for patients who are hospitalized or treated by providers who are not part of the plan’s network.
This year, 14 percent of existing silver-level PPO plans had no annual ceiling on out of network care. When new plans coming to the market and the existing plans that are continuing are factored together, that percentage will double to 30 percent of silver-level PPOs with no out-of-network financial cap in 2016, the analysis finds. Silver level plans, which are the second-lowest cost plans, are the most commonly purchased in the marketplace.
Not having any maximum cap on those costs “is what you expect … in a plan that doesn’t offer out-of-network benefits,” said RWJF researcher Katherine Hempstead. “You’re paying a deductible and then some kind of co-insurance ad infinitum. The average PPO for sale in 2016 is less comprehensive than what was called a PPO in 2015.”
The trend stretches the definition of a PPO and could catch consumers unaware, especially because many mainly check premium and deductible costs when shopping. Additionally, information about out-of-network costs is often harder to find on insurance websites, generally requiring consumers to click through to a lengthy “summary of benefits.” The first page gives details of the plan’s deductible and out-of-pocket expenses, both in and out of network.
But consumers should take that step before they sign up, say advocates, to know what their potential exposure might be. They should especially check PPOs, which many people choose specifically because they cover some out-of-network costs, generally paying a portion of the bill after a patient meets an annual deductible.
“This trend (toward no annual cap in some PPOs) creates even greater risk for consumers going out of network,” said Betsy Imholtz with Consumers Union, the advocacy arm of the organization that produces Consumer Reports.
All of UnitedHealth’s plans in Arizona, for example, have no annual cap on out-of-network costs. This year, for the first time, neither do any of the PPOs offered by the Blue Cross Blue Shield plans in Illinois, Oklahoma and New Mexico. Plans offered through a partnership between insurer Aetna and the Northern Virginia hospital system Inova also have no maximum cap for out of network.
Insured consumers have long faced costly consequences for going out of network.
But those concerns have grown in recent years, especially among people who buy their own insurance because they don’t get it through their jobs. That’s partly because the federal Affordable Care Act changed how insurers do business, including barring them from rejecting people with health problems.
While that has helped consumers with pre-existing conditions, insurers have sought other ways to cut their costs to slow premium growth. To do that, many now offer plans with smaller networks of doctors and hospitals, which can make it more likely that a policyholder will see non-network providers, either on purpose or inadvertently. For example, a patient might go to an in-network hospital, but be treated by a noncontracted physician or lab service.
The resulting bills can run into thousands of dollars. And the providers can “balance bill” patients for the difference between what the insurer pays toward their care and their actual charges, which are generally far higher. That amount doesn’t count toward a plan’s annual deductible or annual out of network maximum, if it has one.