YOUR FIRST AND LAST (HOPEFULLY) GUIDE TO CALIFORNIA HEALTH INSURANCE NETWORKS
Over the years, we’ve put together multiple articles on California network issues but it’s time.
It’s time for one, all encompassing guide with the California networks answers all laid out in one place.
EPO’s. HMO’s. PPO’s. Covered Ca networks. Blue Card.
You name it, we’re going to cover it.
Question is why?
More importantly, why should you take busy time out of your schedule to read it.
Because it directly translates into money. Potentially lots of money out of your pocket.
Health insurance is mandated now and there’s even tax credits available to absorb the cost.
Great. What good is a plan if no one accepts it. Not so great.
Let’s get to the bottom of how to compare the networks and choose the best one for YOU!
First, The Before And After ACA Law Network Changes
A PPO is a PPO? Right?
There are different networks available now since Jan 1st 2014 and a tremendous amount of frustration and confusion has resulted.
With the clients. At the doctor’s offices. At the carriers. Enough to go around.
Here’s the deal.
For most carriers, there are essentially two networks for each different type (PPO for example).
There are the old networks (which still exist) for company sponsored health plans and old “grandfathered” individual/family plans.
These networks are not available to new enrollees after Jan 1st of 2014 (so, now basicallly).
These are broader networks and we’ll get to why later.
There are also new ACA networks
ACA stands for Affordable Care Act but most doctor offices know “Covered California”
IMPORTANT: There is no difference in network between a plan purchased through Covered Ca and one purchased off-Exchange directly through the carrier
Put another way…there’s no way to get away from the new ACA networks.
That question comes up quite a bit.
Here’s the skinny.
The new ACA networks are about 2/3rds the size as the old networks (within a type…i.e. PPO).
There’s no way around that other than through employer sponsored health coverage so that may factor into your decision to keep Cobra or not.
You can always run your quote here:
Is Your Doctor In The New Network?
You can try the online directory by carrier here
There have been issues with the online directories so we recommend asking the doctor,
“What Covered California plan do you participate in?”.
Make sure to say “Covered California” even though we mean ACA since the doctors know that by now.
The replies may be confusing but were happy to find out for you. Just email us the doctor’s name and city to email@example.com
Okay, so that’s the before and after question (very important).
What about the network types?
The Landscape For California Doctor Networks
There are three basic network types now in the market:
PPO, HMO, and EPO.
Each carrier will generally offer 1 or more in most counties (but not all). Most carriers will offer either an EPO or a PPO (but not both) in a given county.
So how do they differ?
Let’s look at each one in detail and give our 20 years experience take on them.
PPO – Preferred Provider Organization
The PPO network is generally the broadest available in a given area.
Here are some highlights of the PPO network:
- Larger than HMO network of doctors
- Does not require a primary care doctor or designated medical group
- Allow more flexibility in self-referral and location
- Pays best benefits in-network
- Limited benefits (very limited in fact) for out of network providers in a non-emergency
- May allow use of Blue Card providers out of State and access across State
UPDATE: The Blue Shield Individual Family PPO plans will not have access to Blue Card in 2019
Those are the highlights of the PPO. What does it really mean?
Well, the benefits are now standardized so a Silver plan is a Silver plan regardless of PPO or HMO.
There used to be benefit differences between PPO and HMO but that’s no longer the case since ACA.
In general, PPO plans are more expensive in a given area for a given aged person
PPO is essentially a giant group discount. On average this discount, also called the negotiated rate, will save you 30-60% off the full price for the medical service.
This discount is even more pronounced with hospital, labs, and facility based care.
We’ve seen claims where the gross rate was $20K and the negotiated rate was $3K!
The discount is still good for doctor. It’s much smaller for medication (but still run your RX through your insurance card).
Who Does The PPO Work For?
PPO’s are generally best suited for:
people who want the broadest access to doctors and hospitals.
People who live close to the California border with another State
People who want access to out of State providers or travel/work elsewhere
Less cost restricted in terms of monthly premium
In most cases, the PPO is the premier choice for networks. There’s rarely a benefit (aside from premium savings) to the HMO or EPO…which we’ll explain next.
What Is The EPO Or Exclusive Provider Organization?
The EPO had fallen out of fashion until the Affordable Care Act but it’s back with a vengeance.
The two Blues (Anthem Blue Cross and Blue Shield of California) have basically offered an EPO in half of the State.
So why the big come back for EPO’s?
The EPO functions very much like the PPO with one exception.
There is no out of network benefits except for a true Emergency with the EPO
Does this really matter?
In our experience, the PPO and EPO have behaved very similarly.
In a true emergency, they are going to take you wherever is closest to get you patched up.
So we’re really talking about non-emergency or elective services?
What’s a real example of the differences between the EPO and PPO?
Let’s say we have a office visit with a small procedure.
The office visit full cost is $120 and the procedure (same provider) is $200. The provider is out of network.
With the PPO plan and a Silver plan, you might pay $90 for office copay and $150 for the lab. That’s roughly $240. Again, in-network, you would have copays but we’re paying quite a bit more since provider is in network.
With the EPO, you would pay the full cost. $320.
Here’s the real take away.
DON’T USE OUT OF NETWORK PROVIDERS FOR NON-EMERGENCY
Or be ready to pay a lot more if you do.
WIth an EPO you have access to the full PPO network in your area and self-referrals work the same way.
Very similar in day to day interaction as long as you STAY in-network.
From our experience, the PPO plans aren’t great out of network anyway. Avoid out of network or be prepared to pay.
This bring us a good point for both EPO and PPO:
Always check with providers before services to make sure they are in-network with YOUR plan (remember, different PPO confusion above).
Also, check the ancillary providers as well. For example, if you have a surgery planned, check the facility (very important), anesthesiologist, etc.
No surprises. That’s our motto!
EPO And Out Of State Or Cross-State Providers
One other key point. Since ACA came into effect, the EPO will likely not allow you access to providers in other States via the Blue Card network or even across the State.
UPDATE: The Blue Shield Individual Family PPO plans will not have access to Blue Card in 2019
Always check first but for some people, this might make a huge different (living on California/Nevada border for example).
Okay, recap. EPO is very similar to PPO except for no out of network.
What about the HMO?
HMO Or Health Maintenance Organization Makes A Comeback
Net net…the HMO was and is an answer to high insurance premium.
The HMO basically gives the doctor a stake in health care costs for patients he/she sees.
The insurer transfer some of the financial risk to the medical group/primary care doctor in managing health care.
What does that really mean for you, the member?
Basic highlights of the HMO network:
- HMO plans generally require a primary care physician (PCP) or medical group
- PCP or medical group is within a radius (i.e. 45 miles) of member’s residence
- HMO’s tend to less expensive than PPO’s or EPO’s
- HMO’s “manage” care more in terms of referrals and course of treatment
- The number of doctors/facilities is smaller in HMO networks
- You can generally change PCP’s only if you’re not in a course of treatment
Alright, so we’re trading off size of network and control for monthly premium savings.
That’s the real trade-off!
That trade off works for many people especially people that do not access much health care.
HMO’s work best in more populous areas (cities, densely populated suburbs, etc)
There are enough members to make this structure work.
Again, the benefits are now standardized. A Gold plan is a Gold plan regardless of carrier or network.
HMO’s and Covered California
HMO’s had disappeared from the individual/family California market until Covered Ca came on the scene. They’re now pretty prevalent in most big areas.
In some areas, the pricing for HMO’s can be much lower (such as Los Angeles county). Low enough to really be a factor in the decision.
Breadth Of Doctors In Each Network
On average, the size of networks relative to each other follows:
pre-Covered Ca PPO – about 80% of California doctors
Covered Ca PPO – about 2/3rds the size of pre-Covered Ca; approx 50% of Ca doctors
EPO – same list but constrained to area and in California
HMO – about 2/3rds the size of PPO network
Future Of Covered California Networks
The carriers (under pressure from legislatures) have steadily added providers to the new networks.
They will always be smaller since coverage is now guaranteed issue and there’s so much political pressure on keeping costs down.
Why did the network shrink in the first place?
The ACA law created both a ceiling and a floor. The ceiling is political pressure for keep rates lower. The floor is the mandated benefits that must be included in each plan.
The doctors (and the drug formulary) were the give. The only place for price pressure to be applied.
The reimbursement to doctors is lower on the new plans. That’s really what drives everything above.
Fewer doctors are willing to accept lower pay (understandably) and therefore, the networks shrink.
We’ll watch how this proceeds but we expect the networks to remain smaller.
When Can You Change Networks And Plans?
Barring a big life change, we have to wait to Open Enrollment of each year (generally Nov 15th – Feb 15th) to change plans and networks.
IMPORTANT: If you were given incorrect information on network participation, we may be able to change outside of open enrollment
You can access the online application here:
Help With The Network And Plan Decision
We have helped 1000’s of Californians find the best priced plan that matches their doctor/hospital needs.
Call us at 800-320-6269. Our services are Free!
This network selection is only one aspect of the decision but it’s never been more important than now.