As the cost of health insurance premiums continue rise sharply, employers and health care plans are looking to the consumer to shoulder more of the cost of their health care. One recent study found that health insurance premiums increased on the average of 21 percent.
With no end in sight, alternative concepts of controlling health care costs are being considered by health care plans and employers alike. Many of these concepts fall under an industry term called “consumer-drive health care.” The theory is the more you, the consumer, are aware of the cost of your health care, the more prudent you’ll be in using your benefits.
One method being implemented in some parts of the country is called “tiering.” Consumers who have Preferred Provider Organizations (PPO) as part of their health care plan already choose whether they will use in-network providers or more costly out-of-network providers. As far as the consumer is concerned, tiering is similar, just a little more complicated.
With a health care plan that includes tiering, your health care providers would be divided into several groups, such as low, medium and high, based on the fees they charge for services. In some organizations, the health care providers could set their own prices, allowing them to choose their tiers, as opposed to current PPOs, where providers have negotiated with an employer to provide fees at a lower price.
Under a tiering system, you can choose a low-tier provider, which would require you to pay nothing or a small co-payment for services. If you choose a medium or high tier provider, you would be required to pay more for your treatment, either with a bigger contribution to your monthly premium or a higher co-payment.
In some areas of the country, the tiering of hospitals is already in place. Under these plans, consumers pay more each day to stay in a medium- or high-tier hospital.
If tiering becomes part of your health care plan, how do you know what level to choose? Here are some tips to help you make decisions:
- Do you like your current physicians? If you’re just lukewarm about your doctor, choosing low-tier providers may be an option for you.
- Do you have any medical conditions that need to be monitored? If so, it may be worth it to pay more stay with the current health care provider who knows your case.
- Where does your physician have hospital privileges? If your doctor practices only at a high-tier hospital, you may want to consider making a move.
- If you are unsure about who to choose, meet with a low-tier health care provider before you are sick. You may pay for this visit out of your own pocket, but it may be worth it in the long run.
- Consider a Healthcare Reimbursement Account (HRA) to pay the higher co-payments for medium and high tier providers. If your employer offers this plan, you can choose to have a fixed amount earmarked for medical expenses deducted from your check before taxes. If your plan requires you to pay higher insurance premiums for higher tier care, this won’t be an option. Premium costs can’t be deducted.
- Talk to your family and friends to find out what they know about low tier providers. You call also call your local medical society or other health care provider trade organization to get information.
Being informed about changes in your health care plan can help you budget for future medical expenditures. Under tiering, you may have to do more research, but the savings could hold down your health care premiums for years to come.