Top-selling plan a good bet, but know drawbacks

It doesn't take an alchemist to turn silver into gold or platinum. At least not in health insurance.

Independence Blue Cross seeks to perform that bit of alchemy with its newest and lowest-cost silver-tier Keystone HMO Proactive plan. Buyers in the Affordable Care Act marketplace have made it the insurer's best-selling product.

It's a lower-cost silver plan with "an opportunity to get platinum-like benefits," said Paula Sunshine, Independence's vice president for consumer affairs.

Of course it comes with caveats. This plan makes you pay more to use certain doctors and hospitals, and consumers can end up paying a lot extra if they don't understand that.

Sunshine wasn't willing to give numbers on how popular the Proactive plan is. Last week, the area's largest health insurer reported it had signed up 90,000 new individual customers since Oct. 1. Independence also said 87 percent of its new customers had made their January and February payments.

Through February, Aetna/Coventry had enrolled 135,000 people nationwide with roughly 80 percent paying their first month's premium. Horizon Blue Cross Blue Shield of New Jersey wouldn't provide enrollment figures.

As the days count down to the March 31 deadline to buy individual insurance, insurers are bracing for a rush of 11th-hour buyers.

"Last week was the best week we've had since December of last year," said Sunshine. "We are seeing more people new to insurance in the marketplace."

Many of those folks will likely consider the Proactive plan. Part of its appeal, said navigator Ted Treverrow of the nonprofit Resources for Human Development, is the overall price: premiums, deductibles, co-pays, and coinsurance.

"It's a very, very good number as far as price goes," Treverrow said. "Sometimes people say they cannot afford the next-most-expensive plan," HMO Silver.

The Proactive plan is the first of its kind for individual consumers in the Philadelphia market. Boiled down, it is an HMO plan that uses a tiered system; members can go to any facility in the Blue Cross network. But they pay more to go to academic hospitals and less for community hospitals.

"It is important to understand that it is not a special network or a pared-down network," Treverrow said. "It is Blue Cross' network divided into three groups."

The internal tiers - Preferred (lowest cost), Enhanced (middle), and Standard (most expensive) - represent rising levels of out-of-pocket payments. For instance, the co-pay for visiting a Preferred primary-care doctor is $20; an Enhanced-level doctor is $35; and a Standard provider is $50. Seeing a specialist works the same way: $45, $70, and $100.

Roughly 60 percent of Independence's doctors and hospitals are available at the Preferred level. But - and here is where the platinum-like benefits come into play - you can go to any provider (primary care or specialist) or hospital in Independence's network.

Now the rub: If you don't stick to tier-one providers, especially hospitals, it can get very costly. University and teaching hospitals are almost exclusively tier three, the most expensive.

Let's break it down. Each tier includes a maximum of five co-pays per admission up to the yearly cap of $6,350 for an individual and $12,750 for a family.

At a tier-one hospital, there's no deductible but you would pay $400 a day for inpatient services. A tier-two hospital visit has a $3,000 deductible and $800-a-day inpatient services. Tier-three hospitals have a $3,000 deductible plus $1,250-a-day inpatient services.

That is real money for many people.

"If you sign up for the Proactive plan and use all tier-three providers, you are not doing yourself any favors," Treverrow said. But the plan is cheaper than what people might pay with a lower bronze plan, Sunshine said.

"If my preferred hospital happens to be a tier three, I am going to pay a $3,000 deductible" for the Proactive plan, she said. "Compare that to a bronze plan with a $6,000 deductible."

People with household incomes between 100 and 250 percent of the federal poverty level can receive a cost-sharing subsidy that reduces out-of-pocket costs, but only on silver plans. Most buyers are also getting tax-credit subsidies on the premium.

An individual at 100 to 150 percent of the poverty line using a tier-one hospital has no deductible and no co-insurance. At a tier-two hospital, there is a $100 deductible and 5 percent co-insurance up to $2,250, while a tier-three hospital has a $100 deductible with 10 percent co-insurance up to $2,250.

"Consumers are realizing that they are still doing better with the Proactive plan," Sunshine said, "and that is why it is so popular."

This story was done in partnership with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

Federal: 1-800-318-2596

Pennsylvania

Resources for Human Development: 855-668-9536

Congreso: 215-763-8870

Get Covered America operates in Pa. and N.J.: No hotline; find events at GetCoveredAmerica.org

In-Serve PA: 855-486-9331

The Health Federation of Philadelphia: 215-567-8001

Mental Health Association of Southeastern Pennsylvania: 267-507-3894

Philadelphia Health Access Network: 1-877-570-3642

New Jersey

Center for Family Services: 1-877-9ACCESS (1-877-922-2377)