6 Min Read
NEW YORK (Reuters) - Are health insurance copays going the way of the dial tone phone, paper checks and dot matrix printers?
This open enrollment season big blocks of 20,000 or 50,000 Americans at a time are transitioning away from the health plan design that has dominated the last two decades, which requires workers to shell out a copayment when they visit certain doctors - often $20, $40 or some other agreed-upon amount.
Among those who have already made the switch are financial services companies with hundreds of thousands of employees worldwide, like JPMorgan Chase & Co and Wells Fargo & Co. "The pace of change varies, according to how big the employer is," says Barry Schilmeister, principal at Mercer, a benefits consulting firm.
In fact, only half of large companies tracked by benefits consultant Towers Watson still offer health plans with copays. Its list of 849 large companies includes employers with more than 1,000 employees, most with over 5,000.
What is on tap for the other half of workers is the world of coinsurance - paying a percentage of healthcare costs, which can range from 10 percent to 40 percent, with varying amounts for deductibles.
A big factor is the shift to high-deductible health plans. One-fifth of employers have switched exclusively to high-deductible plans, almost all of which come with coinsurance, according to the National Business Group on Health, a non-profit coalition of 325 large employers.
Your employer is not going to change course - no matter how much you complain - but management does not want bad feelings. Companies often pony up incentives such as cash in flexible spending accounts (FSAs) or health savings accounts (HSAs) if you take biometric screenings such as a cholesterol test. Some offer free flu shots, 24-hour nurse lines, health club reimbursement, yoga classes and more. (For more tips on how to make the best use of coinsurance plans, see link.reuters.com/wuz53t)
And some doctor's visits might be fully covered, such as yearly well visits. The National Business Group on Health's president and chief executive, Helen Darling, points to IBM, with 433,000 employees worldwide. It has covered primary care for all U.S.-based employees at 100 percent since 2010, after offering a copay plan for years.
Companies realize how important it is to keep the obstacles between patients and primary care physicians low, Darling says. "If you are discouraged to go to primary care, you're going to show up in an emergency situation."
With coinsurance, the biggest obstacle for consumers becomes bill management.
Because you won't be paying a flat fee, your portion of the bill will come in the mail. You are required to pay your share at the rate your insurance company negotiates with your doctor. You'll also get an explanation of benefits from the insurance company, and maybe a check or direct deposit from whatever pre-tax health savings program is attached to your plan. You have to make sure all of those amounts match up.
Coinsurance can be cost-neutral for employees, but most assume it will cost more. "If you're going to have surgery, coinsurance is not so great. But for routine office visits, it might not be so bad," says Alwyn Cassil, director of public affairs for the non-partisan think tank Center for Studying Health System Change.
It was actually cheaper for Cassil to pay the coinsurance than the $20 copay when her primary care doctor was briefly out-of-network. But, she adds, "that varies a great deal by area."
It also differs by plan, given that doctors negotiate rates with each insurer. Coinsurance for a $150 doctor's visit could cost you anywhere from $15 to $60, while a copay could be any range from $5 to $50.
If the paperwork gets too daunting, ask for help. More than 9,000 companies contract healthcare advocates who can explain bills to you and deal directly with insurance companies on your behalf.
Advocates can also go further and negotiate payment plans, fight for denied coverage and find alternative funding for care. They can also locate specialists, make an appointment for you and help you figure out what questions to ask, says Marty Rosen, a cofounder and executive vice president for Health Advocate, the largest advocacy firm. Advocates also decipher bills, large and small, for any member of your family, Rosen says. But most people do not contact advocacy services until they run into a major problem.
Make sure you are not charged for care that should come free, experts note. With changes in healthcare law, your annual well visits are now covered, and you don't have to pay anything. So go. But while you're in the office, don't start bringing up acute problems, or they might bill you for a regular visit.
It is also possible to talk to your doctor about lowering fees. "It's not going to work all the time, but sometimes it does. It's just a matter of bringing it up," Schilmeister says.
No matter what, you are likely to end up with a lot of disparate bills. If you don't keep up with payments, you will end up hurting your credit score.
Maureen Fay, vice president at Aon Hewitt, a benefits consulting firm, says she has seen some large companies pre-fund employee HSAs to help out with costs. That's because these accounts require the money to be in the bank before it can be used, in contrast to FSAs. Fay has also seen employers offer generous contributions to pre-tax health accounts to employees who are having trouble with costs. Most employers also have an Employee Assistance Program to help with financial counseling and financial planning, too.
Employees will eventually get used to coinsurance changes, Fay says. "Employees grouch about it initially, but once they go through and see it's not that different, things settle down."
Editing by Kenneth Barry; Follow us @ReutersMoney or here. Editing by Lauren Young