Blue Shield of California - HMO vs. PPO

[CFM300]

My wife has started a new job and is trying to decide between two medical plans.

1. Blue Shield of California, Access+ HMO Zero Admit 20

$370/month (our cost to cover both of us, employer covers the rest)
$0 deductible
Nominal copays
$1,000/$2,000 individual/family annual max out-of-pocket

2. Blue Shield of California, Full PPO HSA Aggregate Deductible 1300/2600

$550/month (our cost to cover both of us, employer covers the rest)
$1,300/$2,600 individual/family annual deductible
10% copays
$2,600/$5,000 individual/family annual max out-of-pocket

With option 2, we would set up and contribute the max to an HSA each year, but that will only get us a federal tax deduction, since we’re in California.

Factoring in the tax deduction for the HSA, the up-front costs of the plans are roughly equivalent.

Obviously, the HMO will cost us less to use, but restricts our access to specialists and non-participating physicians.

My wife will ask some of her new co-workers for their impressions and experiences, but we thought we’d broaden the sample size by posting here.

Thanks.

[saurabh]

A HMO plan will put far more restrictions on where you can receive health services compared to a PPO. You can't just go see any specialist you want, you need to get a referral from your Primary Care doctor. Look at the top hospitals in your area and make sure they are part of the HMO is you decide to go with it. At the end of the day the "optimal" decision depends on the health status of your spouse going forward. If you are OK with the hospitals in the HMO network, I think you can go with it to save money.

[TinyElvis]

Always go with a PPO and HSA plan, max out your contributions, and don't use it unless you have to. Meaning, don't use the HSA unless you have to. I treat it as another retirement account.

[Lafder]

Another vote for PPO
lafder

[adamthesmythe]

This depends some on your personal situation- a family with kids and many doctor visits might well prefer an HMO.

If you are concerned about good access and more choices of doctors- definitely PPO.

My PPO (and probably others) allow you to go to a specialist without a referral. And often it is faster to get an appointment with a specialist than a non-emergency appointment with a primary care doctor.

For me- the PPO is my choice.

[CFM300]

Just me and the missus. Late 40's / early 50's. No major health issues, and we rarely see doctors. Most likely need for medical care would be a sports injury, although -- knock on wood -- we haven't had a serious one in years.

[Mudpuppy]

Just me and the missus. Late 40's / early 50's. No major health issues, and we rarely see doctors. Most likely need for medical care would be a sports injury, although -- knock on wood -- we haven't had a serious one in years.

Personally, if there's a propensity to sports injuries, I would go with a PPO to get access to a wider range of sports medicine doctors and physical therapists. You never know when you'll end up with that rare injury that only one doctor nearby can treat, and that could be a big problem if that one doctor doesn't take referrals from the HMO.

[DoTheMath]

One factor to consider, if it applies, is coverage while traveling. I travel quite a bit both in the US and abroad for work and my PPO plan provides significantly better coverage while on the road compared to my HMO plan.

[bowtie]

Usually I'd say 'HMO' but since you say costs are pretty much the same, then it'd be a question of how much you'd need someone out of the HMO network.
You might see how extensive the Access Plus is compared to the advantage of seeing anyone you want in the PPO network.

[CFM300]

Thanks for all of the helpful replies, including those I received via PM.

I would be interested in hearing more thoughts from Bogleheads.

[adamthesmythe]

> One factor to consider, if it applies, is coverage while traveling.

Another good point. Blue cross PPOs with a suitcase on the card (really) allow you to use in network providers across the country.

http://national.horizonblue.com/plans/bluecard-ppo

[bhtomj]

I am not familiar with those current plans but I have had coverage in both BSC plans with my previous company. The Access+ HMO has many of the same providers in my area and both plans worked well for me. I switched to the HMO for the same reasons you mention - to save on premiums. The HMO can save a lot of money if someone ends up in the ER and then needing hospital admission (as my wife did last year).

You have to look at what you get with each plan (do you have providers you want to keep) and expected expenditures. We are dealing with this right now as my wife's school district just switched to CALPERS for coverage - more than 10 plans to choose from.

[Dandy]

Health Insurance costs are important. If you can afford it I would recommend the PPO. When a life threatening illness hits you or your loved one, as it did for my wife - do you want the best DR./Hospital in the plan or in the world? Some feel all doctors and hospitals are the same -- I don't. I was lucky my employer plan was a PPO and I was able to get my wife treated by a acknowledged expert in his field - and referrals from him that were also top notch. That was a great relief to me. I avoided the torture of having to weigh the decision of spending tens of thousands? to get the best treatment or saving money and going for best in plan.

All I can say is 20 years later I am glad I never had to worry about that issue. If me, my wife or children got seriously sick I would always be able to say - who is the best -- period. It does cost more in premiums for keeping that choice/option. Most times in plan providers are fine- but when you get a serious diagnosis, PPO will likely look very good.

[Mudpuppy]

You have to look at what you get with each plan (do you have providers you want to keep) and expected expenditures. We are dealing with this right now as my wife's school district just switched to CALPERS for coverage - more than 10 plans to choose from.

You're probably already aware of this, but the CalPERS website has PDFs of the evidence of coverage booklets for the health plans. There are also some side-by-side comparison PDFs.

Keep in mind that some of the CalPERS plans are restricted to police officers, so you can skip over those. There are also some restrictions by location and/or employer. I find this summary PDF is a good place to start: https://www.calpers.ca.gov/docs/forms-p ... ummary.pdf

[CFM300]

Update: we've just received additional information regarding the plans we're considering. Both, in fact, are better than we originally thought.

The HMO has a feature called "Access +", which allows one to self-refer to a specialist, by-passing the Primary Care Physician. One can even self-refer when the PCP physician himself/herself will not make the referral. In other words, self-referral seems to be a trump card. Of course one still needs to see a specialist within the HMO group to be covered.

If we go with the HSA PPO, my wife's employer will make their own contributions to the HSA. Those contributions bring the up-front cost of the PPO down to the level of the HMO. In other words, our PPO premiums minus employer contributions to HSA = our HMO premiums. Of course the PPO will still cost more to use, since it has a higher deductible (the HMO has none) and also has higher co-pays.

We still haven't decided which we'll choose, but are pleased that both plans are actually better than we originally thought.

Additional advice welcome!

[Dandy]

If the cost is not significant - freedom of choice of providers trumps - in an HMO you can only self refer to a provider specialist that is in the plan. You need to verify that since plans change all the time. Good luck and good health.

[jmw]

The ability to self refer is not worth very much. Getting a referral from an HMO doctor is not hard.

The number of providers you can access is much more important. You get to refer to a limited number of specialists in an HMO, which still tend to be those desperate enough to accept the lower compensation requested by the insurer. You think the best providers are willing to provide discounts? Do you think one doctor is as good as the next? I don't. I cherrypick all of my family's doctors.

The best doctor/clinic/hospital will be inaccessible until it is time for an employer open enrollment, ACA open enrollment, or certain life changes that lets you change to the PPO. You want to do this gamble to save $2k? This isn't like choosing no collision coverage vs. $500 collision to save on premiums where it's purely a financial calculation. It's your health we are talking about. At age 50+, health problems start to grow like weeds. Go with the PPO.

[dm200]

The savings of the HMO vs the PPO appear significant, so IMO - I would fully evaluate how this PPO is or is not a "fit" for your situation. Over the years, I have had both good and not-so-good experiences with this type of HMO.

[lemonPepper]

Thinking of switching to blue shield HSA from kaiser hmo. Kaiser really prefers that you don't get any treatment. They even told me since I had a physical last year, I don' t need one this year!

OP, can you tell us how your experience was with blueshield?

[student5]

PPO too- why be stuck with limited choice in an HMO?

[magellan]

If we go with the HSA PPO, my wife's employer will make their own contributions to the HSA. Those contributions bring the up-front cost of the PPO down to the level of the HMO. In other words, our PPO premiums minus employer contributions to HSA = our HMO premiums. Of course the PPO will still cost more to use, since it has a higher deductible (the HMO has none) and also has higher co-pays.

You can contribute a maximum of $6750 to an HSA per year with a family plan. Subtracting out the employer contribution leaves around $4600 left in tax deductible contributions you could make.

In the 28% tax bracket, that's $1288 in tax savings you'd get by maxing out the HSA, which partly wipes out the difference in the deductibles. Some states also let you deduct these contributions from income. Finally, if your employer lets you contribute to your HSA pre-tax, you can also save on fica taxes.

Many people treat their HSA as an extension of their retirement accounts and just let the balance grow from year to year, while paying for medical expenses out of pocket.

[CFM300]

OP, can you tell us how your experience was with blueshield?

We chose the HMO and have been happy with our decision. Before chosing the HMO, we carefully researched the physicians and facilities in the network, including number of specialists from which we'd be able to choose.

We have a primary care physician who we really like and the one time that we needed to consult a specialist, there were many with outstanding credentials from which to chose. The specialist we selected was top-notch. Attended some of the best schools in the country, is super sharp, and spent as much time with me as I wanted. Thoroughly answered all of my questions, clearly and without a hint of a rush.

We live in a very desirable, HCOL area where I think most of the medical providers and facilities are bound to be pretty good. So maybe our Blue Shield HMO experience would not be typical.

[lemonPepper]

OP, can you tell us how your experience was with blueshield?

We chose the HMO and have been happy with our decision. Before chosing the HMO, we carefully researched the physicians and facilities in the network, including number of specialists from which we'd be able to choose.

We have a primary care physician who we really like and the one time that we needed to consult a specialist, there were many with outstanding credentials from which to chose. The specialist we selected was top-notch. Attended some of the best schools in the country, is super sharp, and spent as much time with me as I wanted. Thoroughly answered all of my questions, clearly and without a hint of a rush.

We live in a very desirable, HCOL area where I think most of the medical providers and facilities are bound to be pretty good. So maybe our Blue Shield HMO experience would not be typical.

thanks for your response. I'm in San Jose california. We have been with kaiser for 4 years now. We do understand their system and it has been ok for us. But I'm keen on moving to an HDHP if we could also get good coverage. Sounds like htat it is the case so next time I will move to this plan

[celia]

Besides checking which local hospitals are part of each insurance plan (which was suggested at the top), the choice of medical groups and which doctors/specialists are in each plan is very important. I have seen medical groups with 5 doctors and with 500 doctors. If your HMO has the large medical group with 100 specialists in it, then you might get the same doctors and services whichever way you go. On the other hand, I have seen doctors ask if you are there as a PPO or HMO patient knowing that they can't recommend some things if you are HMO.

It's been several years since we had Blue Shield HMO with self-referrals. We were on it for a short time while my company was transitioning between insurance brokers. There was something about the self-referrals I didn't like, but I'm not sure if I remember correctly. It wasn't the same as just calling up and going to a specialist on your own. I "think" it was that the self-referrals could skip going to the primary care doctor first but you still had to call in and have a referral slip sent to you to see a specialist within the same medical group. If you needed to see the specialist several times, you had to call in several times or get the first referral to say how many times were "authorized". If you have been seeing a specialist for years for an on-going condition and wake up one morning and need to see him, I think you couldn't until you received the referral slip in the mail. I remember I couldn't self-refer outside the medical group. (I tried.) So I suggest researching that further.

In particular, since I have always seen physical therapy unassociated with a medical group, ask how you can see them. Since the physical therapy has to have a referral by a doctor with the diagnosis on it anyway, that may require a doctor visit first, possibly by a specialist who would also require a referral.

CONCLUSION: Self-referral is not what you may think it is!

[Swansea]

PPO.
I've had docs recommend surgery which was not needed, so was thankful I could get an independent assessment which saved me being sliced open.

[beagle1]

I switched from Kaiser Permanente (San Diego) to BSCA. I couldn't quite understand why I would pay the same amount to choose from the limited number of docs in the Kaiser network rather than buying a PPO.

After the ACA was enacted, BSCA provided very poor customer service; I'd wait endlessly on the phone to try to get an answer (I dropped their dental coverage, but was still getting charged for it). These days they seem fine in terms of customer service.

I found their network is more limited than Anthem Blue Cross, which I'm about to enroll on thanks to my wife's employer. It was adequate and I did find a primary care doc I liked, but I can see that my new plan has more places to choose from.

OP, can you tell us how your experience was with blueshield?

We chose the HMO and have been happy with our decision. Before chosing the HMO, we carefully researched the physicians and facilities in the network, including number of specialists from which we'd be able to choose.

We have a primary care physician who we really like and the one time that we needed to consult a specialist, there were many with outstanding credentials from which to chose. The specialist we selected was top-notch. Attended some of the best schools in the country, is super sharp, and spent as much time with me as I wanted. Thoroughly answered all of my questions, clearly and without a hint of a rush.

We live in a very desirable, HCOL area where I think most of the medical providers and facilities are bound to be pretty good. So maybe our Blue Shield HMO experience would not be typical.

thanks for your response. I'm in San Jose california. We have been with kaiser for 4 years now. We do understand their system and it has been ok for us. But I'm keen on moving to an HDHP if we could also get good coverage. Sounds like htat it is the case so next time I will move to this plan

[lemonPepper]

I have been told that docs over treat you when you are on PPO and under treat you when you are on HMO. This is definitely valid with kaiser.

So many things to consider in a healthplan. No doubt most poeple get it wrong unless you are have made many of your own mistakes. I wonder if there is a bogleheads guide to healthcare ?