UA Choice health plan participants will see an increase in the allowable cost paid to out-of-network providers beginning July 1. Premera allows self-insured clients such as the university to pay based upon Medicare rates. In an effort to encourage more providers to join Premera’s network, the allowable cost for out-of-network providers was reduced during FY16 from the 80th percentile of Alaska billed charges to 125 percent of Medicare charges for a procedure. With the start of the new fiscal year the allowable cost will increase to 200 percent of Medicare rates.

While this increase will reduce some financial burden for members, it is important to note the additional cost associated with going to an out-of-network provider. With out-of-network providers, the university plan pays 60 percent of the allowable charge, while members pay the remaining 40 percent. (If there is no in-network provider in the area, the plan pays 80 percent which is referred to as a higher or in-network “benefit level”). But in addition to the 40 percent coinsurance, the provider can “balance bill” the member for any amount above the allowable charge, and out-of-pocket maximums do not apply. Even if you qualify for the higher benefit level, the amount the provider can balance bill you could be significant.

In contrast, Premera negotiates discounted contract rates with in-network providers, then the university pays 80 percent of that amount, after the deductible. The provider cannot send any more bills to the plan member beyond the 20 percent coinsurance, up to the member’s out-of-pocket maximum. As of December 2015, Premera had 20 hospitals and 2,736 providers in its discount network in Alaska and they’re working to add more.

Before you get a procedure, always:

• find out if your procedure needs to be pre-authorized
• contact Patient Care for help finding a recommended provider
• if not using Patient Care verify with Premera if a provider is in-network
• get an estimate of benefits to find out how much the plan will pay and what you’ll be responsible for

A little homework ahead of time can prevent a lot of unexpected expenses later!

For more information on ways to decrease medical costs, please read the March Voice health care article HERE.