A significant change to the plan types offered for individuals and families through Covered California for 2015 will be Health Net dropping their Preferred Provider Organization (PPO) plans. In place of the PPO health plans, Health Net will offer Exclusive Provider Organization (EPO) health plans. This change may be particularly significant for members who relied on both in-network providers but also utilized the health care services of out-of-network physicians and facilities through their Health Net plans.
Health Net drops PPO in favor of EPO
One of the selling points for Health Net, particularly in the Bay Area, was that their PPO network seemed to have more in-network providers than any of the other plans. In Southern California, Health Net only offered a PPO for the Bronze tier level while the Silver, Gold and Platinum were HMO plans. Health Net will continue to have this mix of HMO along with the EPO for Bronze. But in the Bay Area all PPO plans will become EPO plans in 2015. As of the writing of this post, Health Net has not released any information on whether existing PPO members will be able to keep that plan or if they will have to transition to the EPO model. (See also: Health Net PPO cancellation letters and new HSP plan)
No out-of-network coverage under EPO
Exclusive Provider Organizations are similar to Health Maintenance Organizations (HMO) in that there is no coverage for any out-of-network health care services. Preferred Provider Organizations allow the members to receive services from out-of-network providers with certain accumulation and reimbursement rules. The out-of-network deductible for Bronze and Silver plans is generally double that of the in-network deductible. Once the out-of-network deductible is met, the member goes into out-of-network coinsurance, typically 50%, until the maximum out-of-pocket amount for out-of-network health services is met. (See: What is best – PPO, EPO, or HMO?)
EPO has smaller claims risk for carrier
Even though out-of-network deductibles and coinsurance can be expensive for the member, it can be more costly for the health plan. The EPO health plan design prevents a member from going to an expensive provider for say cancer treatment and receiving any out-of-network coverage benefit for the health care services. Health insurance companies design EPOs to limit their exposure to potentially expensive claims from members in order to keep premiums low and stable.
Health Net premium increase among the highest
The premium increases announced by Covered California for the Health Net EPO are in upper range of for all the carriers. The Health Net EPO plans in the Bay Area are increasing 6% – 9% and 7% – 9% in Southern California over their existing PPO plans. Technically, the Health Net EPO is a NEW health plan and shouldn’t be compared to their old PPO health plan in the same regions.
Out-of-network coverage is real a benefit
Out-of-network coverage afforded to a member is a real benefit that the carriers can attach a premium amount to. It is disingenuous to announce that a product or service is increasing in price relative to an existing product when the new product offers fewer benefits. In other words, Covered California is saying that the new 16 ounce bag of potato chips is increasing by 9% over the old bag that contained 18 ounces of chips. The consumer is actually paying more than 9% per chip because they are getting fewer chips.
People use out-of-network services
One of my client’s is incredulous over the change from a PPO to an EPO. This client, who fully understands and accepts the out-of-network rules, stated a heavily reliance on out-of-network providers to manage a particular health challenge. Unless those providers are brought into the Health Net EPO network, which is doubtful, this client will have to incur substantially higher out-of-pocket costs because there will be no coverage for those health care services. Truly, this client will realize a far higher increase in the yearly health care expenses over the 9% increase in premiums as thousands of dollars of out-of-network costs will no longer be eligible for cost-sharing with Health Net.
EPO restrictive network
The creation of this new Health Net EPO may actually be more restrictive than just the loss of out-of-network coverage. Health Net could create a whole new individual and family plan EPO network eliminating many of the providers that drew consumers to the Health Net PPO plan in the first place. In addition, Health Net could further restrict providers to only within the region where the member resides.
Marketing versus facts
In other words, Health Net EPO members in Region 4, San Francisco, might only be able to visit EPO providers in Region 4. All other counties and regions would be out-of-network for the Region 4 members. This is what Blue Shield initially did with their EPO plans. Covered California announced that Blue Shield EPO members will have access to all providers in the Blue Shield PPO network for 2015. But don’t ever take a marketing bullet point as fact.
Evidence of Coverage tells the real story
The truth about the Blue Shield individual and family PPO network won’t be known until Blue Shield releases or posts which providers are “in-network” for 2015. Similarly, until Health Net releases the Evidence of Coverage for their new EPO plans no one knows how Health Net might narrowly configure the network. Consumers should be appropriately skeptical about any consumer friendly plan design or pronouncements by Covered California until the Evidence of Coverage and the list of providers are released by the health plans.
Don’t accept NEW EPO without research
Covered California may have negotiated the new rates and extracted a few concessions from the carriers, but these health plans are ten steps ahead of the ACA and Covered California. Current members of Health Net PPO plans must carefully study the NEW EPO plans from Health Net and not necessarily allow their enrollment to be rolled over into a new 2015 EPO plan. We know that if current members stick with Health Net they will lose any out-of-network coverage in 2015. We won’t know what other surprises, if any, await Health Net EPO members until the Evidence of Coverage is released and a provider network is confirmed for 2015.
Health plan types by carrier by region for Covered California 2015
Below is a spreadsheet of health plans by region for 2015. Red indicates a change in plan type. This information was gleaned from the Covered California 2015 Health Plan Booklet and is subject to change. See the Map of Covered California Plan Regions to determine your area.
| ABC | Anthem Blue Cross | |||
| BSC | Blue Shield of California | |||
| CCHP | Chinese Community Health Plan | |||
| HN | Health Net | |||
| LAC | L.A. Care | |||
| VHP | Valley Health Plan | |||
| WHA | Western Health Advantage | |||
| Types | ||||
| EPO | Exclusive Provider Organization | |||
| HMO | Health Maintenance Organization | |||
| PPO | Preferred Provider Organization | |||
| SA | Health Saving Account | |||
2015 |
||||
Region 1 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | EPO, SA | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 2 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | EPO, SA | EPO | EPO | EPO |
| HN | EPO | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
| WHA | HMO, SA | HMO | HMO | HMO |
Region 3 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO, HMO | PPO, HMO | PPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
| WHA | HMO, SA | HMO | HMO | HMO |
Region 4 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | EPO, SA | EPO | EPO | EPO |
| BSC | PPO, SA | PPO | PPO | PPO |
| CCHP | HMO | HMO | HMO | HMO |
| HN | EPO | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 5 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 6 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | EPO, SA | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 7 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO, HMO | PPO, HMO | PPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
| VHP | HMO | HMO | HMO | HMO |
Region 8 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | PPO, SA | PPO | PPO | PPO |
| CCHP | HMO | HMO | HMO | HMO |
| HN | EPO | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 9 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | EPO, SA | EPO | EPO | EPO |
| HN | EPO | EPO | EPO | EPO |
Region 10 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 11 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO, HMO | PPO, HMO | PPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 12 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | PPO, SA | PPO | PPO | PPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 13 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | PPO, SA | PPO | PPO | PPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 14 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO | PPO | PPO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | EPO | EPO | EPO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 15 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | EPO, SA | EPO, HMO | EPO, HMO | EPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | HMO | HMO | HMO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
| LAC | HMO | HMO | HMO | HMO |
| Molina | HMO | HMO | HMO | HMO |
Region 16 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | EPO, SA | EPO, HMO | EPO, HMO | EPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | HMO | HMO | HMO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
| LAC | HMO | HMO | HMO | HMO |
| Molina | HMO | HMO | HMO | HMO |
Region 17 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | PPO, SA | PPO, HMO | PPO, HMO | PPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | HMO | HMO | HMO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
| Molina | HMO | HMO | HMO | HMO |
Region 18 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | EPO, SA | EPO, HMO | EPO, HMO | EPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | HMO | HMO | HMO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
Region 19 |
Bronze |
Silver |
Gold |
Platinum |
| ABC | EPO, SA | EPO, HMO | EPO, HMO | EPO, HMO |
| BSC | PPO, SA | PPO | PPO | PPO |
| HN | EPO | HMO | HMO | HMO |
| Kaiser | HMO, SA | HMO | HMO | HMO |
| Molina | HMO | HMO | HMO | HMO |
| Sharp | HMO 2, SA | HMO 1, 2 | HMO 1, 2 | HMO 1, 2 |
Covered California Board Meeting
Certified Insurance Agent Kevin Knauss addresses the Covered California Board members at their August Board meeting about Health Net terminating their PPO plans with no notice in the health plan booklet and the data transfer problem between Anthem Blue Cross and Covered California that has prevented August enrollments from being uploaded to the Blue Cross billing system.
