Obamacare health plans are required to meet the standards mandated in the Affordable Care Act, but plans may choose whether to cover out-of-network providers and whether to require referrals for specialist visits. Preferred provider organizations (PPOs) cover out-of-network providers and do not require referrals in most cases. Exclusive provider organizations (EPOs) and health maintenance organizations (HMOs) don’t have out-of-network coverage, while point-of-service (POS) plans and HMO plans require referrals.
Because PPO plans generally are the most flexible among the four plan types, HealthPocket in Mountain View, CA, analyzed monthly premiums on the 2015 federal health insurance marketplace to determine whether they were lower in counties where PPO plans were available. HealthPocket.com is a free website that compares and ranks all health insurance plans. HealthPocket publishes health insurance market analyses and other consumer advocacy research.
HealthPocket found that in counties with no PPO plans, the average Obamacare premium for a 40-year-old individual was $327.28. The average Obamacare premium in counties with PPO plans was slightly lower at $325.43, despite PPO plans having an average premium of $339.68 and accounting for almost half of all plan options on the federal marketplace. Monthly premiums for HMO, EPO, and POS plans were 5% higher in counties with no PPO plans than in counties with PPO plans.
Premiums for POS plans were 6% higher in counties with no PPO plans than in counties with PPO plans, while HMO premiums were only 2% higher. EPO plans had the greatest premium cost difference, with average premiums of $335.55 in counties where PPO plans were available and $387.21 in counties where PPO plans were unavailable, which is an increase of more than 15%.
HealthPocket also found premium differences between counties with only one available plan type and counties with multiple available plan types. Plans in counties with only one available plan type had an average premium of $350.61, 8% higher than the average premium of $324.06 for plans in counties with multiple available plan types.
Among the four plan types, PPO and POS plans might appeal most to consumers who want to continue seeing their current doctors if other plans don’t cover their current doctors in-network. However, cheaper HMO plans could be preferable for consumers who don’t mind staying in-network and getting referrals from their primary care doctors. The results of this analysis show that consumers benefit when PPO plans are available to them, even if they choose not to buy PPO plans, because the other available plans have lower premiums.
The full report and the methodology, which is titled, Obamacare premiums higher in counties without preferred provider organizations, is available at http://bit.ly/1ETCLbr.
Clarification
In our June 2015 cover story, we reported point-of-service collections at Winston-Salem, NC-based Novant Health.
We should have written that collections increased 19%, which was an additional $3.6 million, in 2014. The number of payment plans increased by 27%, which was an additional $2.8 million in revenue, in 2014 when compared to the previous year.
