Why do consumers end up paying more with tiered-hospital health plans?

Employer-sponsored health insurance plans created tiered pharmacy co-payments to save money when the demand and price of brand-name prescription drugs dramatically increased. Now they are also trying to develop the same type of tiered plans for hospitals.

Under this particular plan, you will be charged less for receiving medical services from a hospital that offers the best rates. Hospitals that offer consumers the best rates are usually community hospitals for people who want to save money.

Bob Hunter, insurance analyst for the Consumer Federation of America says, “If someone in your family is very sick, you’ll go anywhere, do anything, pay anything to make them well. Insurance companies know the consumer will pay the difference.”

However, don’t go running to your insurer asking them why they didn’t inform you about this earlier. As a matter of fact, very few insurers offer this type of privilege.

The plans that do offer these advantages are Blue Shield and PacifiCare in California and Blue Cross and Blue Shield and Tufts Health Plan in Massachusetts. Tiered hospital rates in 2003 were rolled by CIGNA. However, it has yet to announce its introductory markets to consumers.

Blue Shield of California is offering “hospital network choice” that is a program offered to small and medium-sized employer groups as well as individual policyholders. This program has been effective since April 1, 2002. Depending on their cost, hospitals are categorized as “affiliated” or “choice”.

However, the same out-of-pocket co-payment is charged to members of Blue Shield members who choose “choice” hospitals. Keep in mind that consumers who end up choosing “affiliated” hospitals will pay a higher co-payment. Emergency services at any hospital are not subject to higher co-payments and are exempt from the program.

The thing that bothers many consumers is the difference between quality and quantity. Anyone can afford a cheap doctor who might still provide medical help, but will it be worth it? There comes a point where you must ask yourself a question of comparison – what is more important to you, your health, or your money? Even though the doctors who offer help for a cheaper price still do a pretty good job, you should go for the best doctors not the cheapest.

Hunter claims, “Let’s face it, higher quality care costs more. People should go for the best doctors not the cheapest. Insurance companies like to point at quarterly figures and say, ‘Look how much we saved by doing this!’ But do these practices really save money in the aggregate?”

There you have it. Ask yourself this question and compare the difference between quantity and quality.