My health insurance has three tiers: the preferred tier, the in-network tier, and the out-of-network tier. Not every service is available in preferred, but when it is, the coinsurance we pay is less and the deductible and out-of-pocket maxes are both less than in-network tier. This sounds simple, right? Unfortunately, the tier structure has resulted in some weird scenarios.
My son has had a couple of rounds of ear tubes for chronic ear infections, in fact both my kids have. With my older child, the first round of tubes were done at a nearby, in-network hospital, not preferred, because the out-of-pocket cost to us was in fact cheaper. We were on a copay plan then, not high deductible, so we actually saved more money by selecting the in-network hospital. This is counter to the structure that is set-up and only something we discovered because we went through the steps of getting cost estimates for the service and making an informed choice. Had we simply followed the plan structure, we’d have been stuck with a higher bill. With the upcoming price transparency rules taking effect in 2021, this consumer price comparison between facilities will gain traction, which could lead to more confusing scenarios like the one we faced for my son. I hope insurance companies recognize that it makes sense to not penalize in-network over preferred tier just off face value because some procedures will turn that upside down once patients start researching the costs for themselves.
Fast forward a few years and we have another child, and are now on a high-deductible plan with the same tier structure. This time around we felt a lot of pressure to use the preferred tier, and the costs were very close between the preferred and in-network tiers, so we did. This ended up doing us a disservice – because there is more to health care than just cost – and we should have kept the pediatric ENT surgeon we already knew and had a relationship with from our first child. We ended up finding out that he would need an eye surgery too, just a week before the ear tubes were scheduled to get placed. Had we stuck with the surgeon we used for my first child, this would have been great, as the eye surgeon and that ENT often do these cases together, using one hospital visit and one episode of anesthesia, meaning less cost and less risk for everyone. Since we selected a different provider, we were unable to gain that synergy, and ended up paying more money, having a second anesthesia event for my son, and I’m certain the insurance company ended up paying out more of our behalf for two procedures.
These multi-tiered options don’t seem to work out well in the long run, even though their initial thought does seem to make sense. The patient is penalized twice, in having both a higher coinsurance and a higher deductible, when really the patient is not likely seeking out more costly care, just more comprehensive or coordinated care. We’re already financially motivated to keep money in our own pockets, we don’t need an extra tier system and higher coinsurances and deductibles. I’d love to see insurers pick one or the other. There are also gains to be had in coordination of care by not forcing specific providers on patients. My preferred tier has no pediatricians, so the ENT we saw the second time that was preferred did not have as easy a time getting records IN or OUT to our pediatrician, whereas the ENT we saw the first time used part of the same health system as the pediatrician’s office, so all their records are immediately at each other’s fingertips. That counts. The ENT could see how many ear infections, what antibiotics were used and when, and on the flip side, they could later see the progress notes from my pediatrician and determine that we could skip an ENT follow up based on the pediatrician’s follow-up notes.
Give patients back their choice in providers and don’t financially penalize them, especially not twice. Patients aren’t looking to go spend more money than they have to. Especially the high deductible plan patients. Health plans may mean well trying to be good stewards of healthcare resources and dollars, after all, their income is from people’s premiums, often sick people’s premiums, but I do not think the tier system is helping high deductible plans keep costs down nearly as much as it might be helpful for copay structure plans. Especially if you’re penalizing patients twice by increasing both the deductible and coinsurance rates.