Page 48 - FOP March 2017 Newsletter

Explanation of
2017 Medical Plan Changes
What is the consequence to me and my family of the implementation of the Blue Choice Nested Net- work? Does this mean I will be paying more than before?
The implementation of the Blue Choice OPT Net- work (Tier One/Tier Two) means that officers and their families will have a choice of which tier of med- ical providers but to use when they need care. The Blue Choice OPT Network includes all PPO Network providers split into either Tier One or Tier Two. The Tier One Network provides a smaller selection of hospitals. The rest of the PPO hospitals are included in Tier Two. Tier One hospitals offer lower prices on average than Tier Two hospitals. Here are the num- bers:
last year: An officer goes into a hospital and has a procedure that is billed for $1,000. However, the City’s arrangement with that provider calls for a 60 percent discount in the billed charge. In this example, the officer pays $100 (10 percent of the billed charge). The City pays $300 and the provider writes off $600 as a PPO discount.
In the 2017 medical plan, changes for the FOP require the City to share the facility providers’ dis- count with officers. Now, the officer’s coinsurance is a percentage of the discounted amount, not the billed amount. Return to the example of the $1,000 charge. If the discount is 60 percent, the officer pays 25 percent of $400 ($100), the City pays $300 and the provider writes off the rest. The amount of the discount varies from provider to provider, so in some instances, 25 percent coinsurance re- sults in the officer paying the same amount as in the above example. In other instances, officers will pay less than they would otherwise, and, in some instances, the officer might pay slightly more.
The 25 percent coinsurance applies only to pro- viders in Tier Two. If the officer uses a provider in Tier One, the coinsurance is not only lower than in the PPO Network (10 percent versus 25 percent), but the coinsurance is also calculated based on the discounted amount. Also, any necessary Emer- gency Room doctor and hospital charges are paid at the Tier One level.
Note: These examples assume the applicable de- ductible has been satisfied. If the deductible has not been satisfied at the time of service, the lower deductible applicable to Tier One makes it even less expensive. And, if the officer uses a Tier One facility, the out-of-pocket limit is $500 lower for 2017 than it was for 2016.
Another savings feature is that any amount that goes toward the Tier One deductible also counts to- ward the Tier Two deductible, so the maximum de- ductible amount in the plan year is the same $350 as it was in 2016. Similarly, any expense contribut- ed toward the Tier Two deductible counts toward the Tier One deductible. This same “cross-count- ing” applies for the out-of-pocket limit as well, so
Individual Deductible Family Deductible
Individual out-of-pocket limit
Family out-of-pocket limit
Tier One
$300 $900 $1,000
$2,000
Tier Two
$350 $1,050 $1,500
$3,000
Note: The cost figures for the Tier Two Network are the same as in 2016.
What about coinsurance changes in the PPO net- work? Last year, the coinsurance was 10 percent. Now it’s 25 percent. Why such a huge increase?
When comparing percentages, ask “percent of what?” Until 2017, coinsurance for officers utilizing hospital, skilled nursing, dialysis and homecare fa- cility providers in the PPO Network was 10 percent of the billed amount of the charge from the provid- er. This did not take into account that the City is the beneficiary of negotiated discounts from the provid- ers such that the actual cost to the City is typically less than the billed charge.
Take this example of how it would have worked
48 CHICAGO LODGE 7 ■ MARCH 2017