In the next few weeks you will need to make a decision about your health insurance. Before I say what’s on my mind, let me say that there is no right or wrong policy type that will meet everyone’s insurance needs. The important thing is that you enroll in a plan that best meets your needs.
However, having said that, I must admit that, by far, the most customer service problems I get during the year are because an individual chose the wrong type of plan for their needs.
That happens for both people with Medicare Advantage plans and A.C.A. plans. In and of themselves, there is nothing wrong with either type of plan, but the problems occur because people enroll in them based upon premium only and do not bother to learn how the plan works until it is too late.
Often the least expensive form of Medicare Advantage are HMO type of plans. Many insurance companies offer them for a $0 premium. The problem with HMO plans are that they require you to go to a Primary Care Physician (PCP) first if you have any physical problems. You can only go to a specialist after you get a referral from your PCP and the, even if your desired specialist is in the network, you can only go to that specialist if you first obtain a referral from your PCP. If your PCP is contractually obligated to refer patients to a different specialist within the network, you have no choice but must use the specialist that you were referred to.
The is a less common type of Medicare Advantage plan, called a PPO. It also uses a network of physicians but works entirely differently. With a PPO style plan, you are not subject to the PCP or referral rules. If you feel that you need a specialist, you can go directly to that doctor and not have to delay treatment while you first go to a PCP.
Just be aware that you will still want to verify that your doctor is within the plan’s network. That is because doctors who are within the plan’s network have contractually promised the health insurance company that they will do your insurance paperwork for you and also have promised to give you an additional discount on what they charge.
Here is where the biggest difference is, and the source of most of the problems I see during the year. When people do not follow all of the rules and limitations imposed by HMO style policies, they end up being personally liable for all of their medical bills.
There are much fewer new rules that people must learn for a PPO style plan, and even if they make a mistake, and use a doctor/hospital that is not in the plan’s network, the insurance company will still help with the medical bills; just remember that if you elect to use a doctor/hospital that is within the plan’s network, the insurance company will pay more of the bill.
Unlike HMO plans, PPO style Medicare Advantage plans have more than a $0 premium.
If I am working with someone who is in good health, and is willing to learn the HMO rules, and is flexible with what doctors/hospitals; a $0 premium HMO Medicare Advantage plan may be all that is required.
However, if I am working with someone who already has a health issue, does not want to take the time to learn new health insurance rules, or already has a specific set of doctors, I typically recommend that they spend the nominal extra premium.
I also recommend a PPO plan for retirees that frequently travel in the United States. While both HMO and PPO plans will cover emergencies, the HMO will not automatically provide a doctor for you if you just get sick while you are out of town, a PPO will.