The passage of the Affordable Care Act (ACA) prompted many changes to our nation’s healthcare system, but how are plans offered through the healthcare marketplace established by the ACA different from plans outside the marketplace? Below, your trusted California health insurance agent highlights the main differences.
Health insurance plans purchased through the marketplace — whether a Preferred Provider Organization (PPO), Health Maintenance Organization (HMO), or Exclusive Provider Organization (EPO) — have standardized limits of coverage. Plans are offered in a tiered system with different levels of coverage that include bronze, silver, gold, and platinum-level policies. The coverage limits for each level are as follows:
- Bronze –– 60/40 (Plan pays 60% of covered expenses, subscriber pays 40%)
- Silver –– 70/30 (Plan pays 70% of covered expenses, subscriber pays 30%)
- Gold –– 80/20 (Plan pays 80% of covered expenses, subscriber pays 20%)
- Platinum –– 90/10 (Plan pays 90% of covered expenses, subscriber pays 10%)
If all plans through the marketplace are standardized with the same coverage limits, you’re probably wondering what the difference is between a PPO, an HMO, and an EPO purchased through the marketplace.
It really comes down to networks, deductibles, and premiums. HMOs purchased through the marketplace still require that patients go through a primary care provider for referrals to specialists and stay within the network, and PPOs still offer the same flexibility to see a specialist without a referral.
The difference is that cost-sharing (coinsurance) amounts are now the same for plans of the same tier (e.g. Silver-level plan), whether you have a PPO, an HMO, or an EPO. Additionally, while HMOs used to be typified by lower deductibles and less cost sharing, HMO plans through the marketplace often have higher deductibles, and cost-sharing has been standardized. Generally, you can expect lower premiums with HMOs than with PPOs through the marketplace—the opposite of how it used to be.
What Is an EPO, Anyway?
EPOs are very similar to PPOs in that they allow subscribers to a specialist without a referral, but an EPO offers only in-network coverage for non-emergencies. So, a subscriber who sees an out-of-network doctor for a physical exam, for example, would not be covered by insurance. It’s important to note that for emergencies, all plans (PPO, HMO, EPO, etc.) will cover emergency services at the rates stipulated in the plan and then transfer the patient to an in-network hospital as soon as possible.
One last note about cost-sharing: PPO subscribers should be cautious about seeing out-of-network providers, due to limited fee schedules, which are payment structures that place caps or limits on the dollar amount an insurance company will reimburse doctors/hospitals for services and procedures. Although PPO plans offer out-of-network benefits for non-emergencies (whereas EPOs don’t), the payment is based on a limited fee schedule. As an example, suppose a person’s coinsurance amount (the percentage the insured person must pay for services and procedures) for an out-of-network procedure is 50%, but the insurance company only reimburses the provider at half (50%) of the charges, based on the limited fee schedule agreement. The subscriber can then reasonably expect that only about 25% of the charges will be covered. Not a great deal. Whenever possible, always see in-network providers.
We hope we’ve helped highlight how plan structures have changed under the new healthcare laws. For additional questions or for a California health insurance quote, call us today.