Evaluating Group Health Plans

Health Insurance Buyer's Guide

If you have several group health plans to evaluate, there are four main areas you should assess.

Policies and reimbursement

Some group health plans set artificially low limits on the maximum payment. Make sure the policy you choose offers at least $1 million of coverage, since costs for treating catastrophic illnesses can easily reach astronomical amounts.

Also, watch out for low reimbursement levels. Some policies pay a set maximum per procedure, which can be far less than what physicians in your area actually charge. If the claim payment falls short of the bill, the patient can be left paying the difference. To avoid this, you may want to check with a physician to see if reimbursement levels are within the normal billing range.

If you are evaluating PPOs or POSs, avoid overpaying for the flexibility they offer through high deductibles and co-insurance. Be wary of policies that require patients to co-insure more than 25 percent of the cost of treatment or ones that continue to charge co-insurance for costs in excess of $10,000.

Coverage and features

Virtually all group health plans cover hospital and emergency care. Most also cover outpatient care, which includes routine exams, lab work, and office visits. But plans can vary significantly in other areas. You may find that some do not include treatments such as prenatal and postpartum maternity care, prescription drugs, and ambulance service – or have very different co-payment or co-insurance fees in these areas.

Pay particular attention to provisions for long-term treatments such as mental health or substance abuse: some group health plans offer insufficient coverage in these areas. Also check provisions for long-term illnesses and restrictions for pre-existing health conditions such as diabetes or asthma.

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Doctors

The quality of physicians participating in a group health plan can be the most difficult area to assess, although it is arguably the most important.

Inquire about the screening process that is used to sign up physicians. A screening process should ideally include checks of the doctor's background, including analysis of any previous malpractice issues.

Also ask how many physicians in the network have been certified by the American Board of Medical Specialties. To be certified, a physician must demonstrate competency in a specialty by passing tests or meeting training requirements. Ideally, 85 percent or more of the physicians should be board certified.

Though it is not unusual for HMO and PPO networks to be enormous, some group health plans sign up doctors simply to boost their numbers. To get a better sense of the actual availability of doctors in the network, ask what percentage of doctors actually accept new patients.

A final statistic to evaluate is the physician turnover rate. This can give you a good indication of the likelihood you will be forced to switch doctors. The turnover rate can also indicate how satisfied physicians are with the rules for treatment and reimbursement within the network. Better programs usually have a turnover rate of 3 percent to 5 percent.

Grievances

Save your employees many potential problems by researching how the insurers resolve grievances from plan members. Quality organizations should have a set procedure in place for airing disagreements before a grievance board. A clearly outlined appeals process gives members a way to protest unfair reimbursement levels or other problems.

Consulting the state department of insurance, which keeps records of patient complaints, may shed some light regarding patient satisfaction. If there are a lot of outstanding grievances from current plan members, a warning flag should go up.

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