Many Flexible Health Plans Come With A Costly Trap

Rob Colvin/ImageZoo/Corbisi

Rob Colvin/ImageZoo/Corbis

Citing flexibility, many consumers choose health plans that provide some coverage outside the insurer’s network. Traditionally, the plans not only paid a portion of the bill for doctors and hospitals not in the core plan, but also set an annual cap on how much policyholders paid toward out-of-network care.

Not anymore.

An increasing number of the preferred provider plans, or PPOs, offered under the federal health law have no ceiling at all for out-of-network costs. Consumers who choose them face unlimited financial exposure, similar to what more restrictive and often less expensive types of coverage, such as health maintenance organizations, impose on people who use services outside their networks.

Forty-five percent of the silver-level PPO plans coming to 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 finds. Uncapped plans could lead to tens of thousands of dollars in bills for patients who are hospitalized or treated by providers who aren’t part of the plan’s network.

This year, 14 percent of existing silver-level PPO plans have no annual ceiling on out-of-network care. When new plans coming to 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 plans, which are the second-lowest cost plans, are the most commonly purchased in the marketplaces.

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 people mainly check premium and deductible costs when shopping. Additionally, information about out-of-network costs is often harder to find

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