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Health Plan Battle: HMOs Beat PPOs

Median annual out-of-pocket premium costs up $500 since 2006

By James Limbach
ConsumerAffairs.com

August 4, 2009
With the battle over health reform likely to last well into the fall, a new survey suggests that a lot of consumers are ready for some changes.

People who took part in the latest Consumer Reports survey say median annual out-of-pocket costs for premiums increased by 38 percent in the past two years, and only 64 percent of those surveyed were "very" or "completely" satisfied with their current health insurance plan.

"That's a lukewarm response and a slight drop from the 67 percent in our 2007 report," said Mandy Walker, senior project editor for CR. "In terms of services we rate, that puts satisfaction with health insurance above satisfaction with cable TV, a perennial whipping post, but below pharmacies and real-estate agents."

Eighty-four percent of the 37,481 magazine subscribers who reported their experiences over the course of a year were in an employer-based plan, which they could keep under most health-reform proposals now before Congress.

Annual out-of-pocket costs for plan premiums were up 38 percent from two years ago for both those in HMOs and PPOs. Respondents to the survey conducted by the Consumer Reports National Research Center reported a median premium cost of $1,829, an increase of about $500 since 2006.

The survey results also indicate that choosing an HMO over a PPO seems like a smarter choice than in the past. While overall satisfaction scores were similar, respondents in HMOs paid less for premiums than people in PPOs ($1,466 compared with $2,003) and less out of pocket on their medical bills. Among PPO members who were seriously ill, 69 percent paid $1,000 or more on bills, while only 47 percent of seriously ill people in HMOs spent that much.

In the past, HMO members who were seriously ill had more trouble getting access to care, but this time there was little difference: Of HMO members who were ill, 15 percent had problems getting care, compared with 14 percent of PPO members.

Problems with service

People in PPOs had more trouble with their bills. Overall, 24 percent of people in PPOs had a billing problem, while just 11 percent of HMO members had similar issues. Moreover, 33 percent of PPO members who reported having a serious illness had billing problems versus just 14 percent of seriously ill HMO patients.

Twenty percent of PPO members also said they had trouble with telephone customer support and were more likely to contact the plan several times to get a problem solved, versus 12 percent of those in HMOs.

For the first time, Consumer Reports asked subscribers about using plan Web sites to seek information, forms, and customer support. HMOs came out on top again, and had top-notch scores for ease of navigation, easy access to forms, and online help.

Rating the plans

Respondents' experiences with their health insurance were far better if they were enrolled in plans at the top of CR's ranking. Only four percent of respondents had problems getting the care they needed in higher-rated plans.

Eighteen percent of those surveyed said they had trouble getting to see a plan doctor at some point during the year. Among users of some lower-rated plans, as many as 16 percent complained it was either difficult or impossible to get needed care.

Among HMOs, Group Health Cooperative and Health Alliance Plan topped the list and were also in the top 10 in 2006 survey. Members of these plans reported fewer problems getting the care they needed, and HAP members were more satisfied with their choice of doctors and the care they received.

Rounding out the top rated for HMOs were several Kaiser Permanente plans around the country; Preferred Care; Harvard Pilgrim Health Care; and Independent Health.

At the bottom of the HMO list, Oxford Health Plan and Aetna Health HMO members gave the plans lower ratings for choice of providers. Oxford members also reported more problems getting the care they needed, while Aetna plan members reported more problems getting access to doctors.

Anthem Blue Cross and Blue Shield of Connecticut was among the top-rated PPOs, as it has been in past surveys. Members remain very pleased with their providers and care they received. Other top-rated plans include Blue Cross and Blue Shield (AL, IL, and MA), Excellus Blue Cross Blue Shield (NY), and Independence Blue Cross (PA). GHI (Group Health Inc.), Great-West Healthcare and Health Net members rated choice of doctors in those plans worse than other PPOs.

How to choose

Picking the right plan depends on many factors, including health conditions, whether specific doctors participate in a plan and what the employer offers:

• Try an HMO if cost is key. Compare coverage costs from the past 12 months with the total possible cost of monthly premiums, deductibles, co-pays or co-insurance, and prescription costs of other available plans.

• Not willing to switch doctors? For consumers who want to continue seeing providers who are not members of an available HMO, a PPO plan might be better. The HMO might pay very little, if anything, for nonplan providers.

• Check Consumers Reports' ratings. Survey reader scores are based on overall satisfaction with the health plans. The ratings also measure access to doctors and medical care, choice of doctors, quality of telephone support, frequency of billing problems, and the care doctors provide. Web site quality and support is also included.

• Get a report card. For plans not in CR's ratings, check out NCQA's Web site (www.reportcard.ncqua.org). The site, which is partially funded by the insurance industry, provides report cards on 55 PPOs and 404 HMOs.

• Consider health issues. Patients with chronic conditions may run into shortcomings in either kind of health plan. Look for one with disease-management programs for specific conditions.

• Check complaints. Call the state department of insurance to see whether current members have logged complaints against the plan.

• Plan ahead for changes. For example, if having children is in the plan keep that in mind when selecting a plan; look for one that pays for prenatal care and well-baby visits.

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