Hints While You Puzzle Through Your Health Insurance Options from a Blog Reader

As we are coming up to the open enrollment period for the various health insurance options, Prof. Bill Zame of Economics sent me an email with a cautionary note readers may want to consider.  (Edited excerpt):

When insurance plans use the term “out of pocket maximums,” they do not mean what an ordinary lay person would mean by the term. As used by the insurance industry and the [open enrollment] plans, only healthcare expenses that are “ordinary and necessary” (by [industry] standards) are included toward  “out of pocket maximums” and only charges that are deemed to be in the range normally charged for services are included toward  “out of pocket maximums.”  If one had a treatment that the insurance company/plan deemed “experimental,” it would likely not be covered directly and the costs incurred would not be counted toward  “out of pocket maximums.” If one chose a surgeon/hospital not in a participating provider group, the plan would pay only a fraction ([perhaps] 40% or 50%) of what a participating provider would charge and count only the remainder of what a participating provider would charge toward  “out of pocket maximums.”  This is, of course, not a small matter; uncovered charges for treatments deemed “experimental” or for service charges higher than those a participating provider could charge [could be large.  For example,] CT scans, MRI’s, and hospitalization charges could easily run to hundreds of thousands of dollars.

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Open enrollment runs Oct. 28 – Nov. 26.  There is a link at UC benefits concerning the various plan changes and options at http://atyourservice.ucop.edu/oe/index.html.