In one week, we release our book The End of Employer-Provided Health Insurance, which discusses the obvious solution to our nation’s employer health insurance woes - employer-funded individual health insurance. The book is available for pre-order on Amazon.com and BarnesandNoble.com.
This article is part of an on-going series of articles on The 10 Reasons Group Health Insurance is Bad for You, Your Family, and Your Company.
The fourth reason group health insurance is bad for you, your family, and your company is because it is limited -- you don’t get to pick your doctors and hospitals.
Group Health Insurance is Limited
A major limitation of group health insurance is that you and your family do not get to pick the provider network. The provider network refers to the medical providers (e.g., doctors and hospitals) covered by the plan.
Today’s health insurance plans are dominated by the managed care model—for each plan, insurance companies maintain a list of doctors and facilities from which you can choose. This list is called the provider network. The provider network is the group of doctors, clinics, hospitals, and other medical sites covered by your health insurance. Different health insurance plans will provide you with different levels of coverage depending on whether you receive medical care inside or outside of the plan’s provider network.
For example, if you seek care outside of this provider network, your insurance may not pay for the services or may pay a lower amount. Health insurance companies want you to use the healthcare providers in their network for two reasons: (1) the providers meet the health plan’s quality standards, and (2) the providers charge the health insurance company discounted rates for services provided to policyholders.
Group health insurance plans will typically provide access to a provider network. If you seek care outside of this network of providers, your insurance may not pay for the services or will pay a lower amount. Today, most medical providers, from local pediatricians to big-city hospitals, charge patients who don’t belong to their health insurance network much higher prices (sometimes 10 times higher) than they charge to those in their network for the exact same service.
If your preferred doctor or hospital providers are not in your group health insurance plan’s network, the plan may not cover you if you continue to receive services from those doctors.
Even worse, the only way to manage this problem is to either (1) switch medical providers; or (2) switch employers.
What’s the Solution?
You should switch to individual health insurance because it’s not limited. With an individual plan, you get to pick your doctors and hospitals. A common question regarding individual health insurance is “can I keep my same doctor?”
The answer is yes. Each individual health insurance plan has a network of providers, including hospitals, laboratories, doctors’ offices, imaging centers, and pharmacies. Every health insurance provider has contracts with these medical providers agreeing to provide services to covered plan members at a designated cost. If you have a preferred doctor, it is vital to review the provider directory for each plan before purchasing a policy to ensure that your doctor is in your new plan’s network.
I will be going through reason number five (group health insurance is one-size-fits-all) tomorrow.