Protections for New York Consumers: Understanding Your Out-of-Pocket Costs
As of April 2015, state law gives New York consumers extra protections when shopping for health insurance. As a part of the law, insurers need to explain what out-of-network services they cover and how they decide what they will pay for out-of-network care, using the same standard so that you can easily compare different plans. You have access to more information about exactly who is in your network. You also are protected from unexpected “surprise” bills for planned care and for bills for emergency services that are out-of-network.
By law, consumers living in New York State have certain protections when shopping for and using their health insurance. Your insurer must provide up-to-date information about who is in your network. They must explain what they will reimburse for care outside of their network of doctors, hospitals and other providers. They are required to give examples of their reimbursement calculations for common out-of-network services. In these examples, all insurers must use the same standard of “usual and customary cost,” which is FAIR Health’s 80th percentile benchmark charge for a service, so that consumers can easily estimate their out-of-pocket costs for different plans. Check plan documents to see examples and compare one plan to another.
The law also provides protections for high out-of-network bills for emergency services. If you are insured, you are protected from high bills for out-of-network emergency care for health problems that threaten life or in other ways call for immediate attention. (But, if you have a high deductible plan, there can be bills for in-network services that you are likely to consider “high.”) If you are uninsured, you may submit disputes about bills for emergency services to a dispute resolution process established by state law.
Under New York law, you also are protected from unexpected “surprise” bills for planned care if you inquire in advance to find out if all your providers will be in your plan’s network. A surprise bill typically happens when you get care from an out-of-network doctor working at an in-network facility. In New York State, if you get a surprise bill for planned care from an out-of-network doctor or facility when you tried beforehand to stay in your plan’s network, you have to pay only the amount you would have owed for in-network care.
Suppose you have a life-threatening or degenerative condition, and you need a doctor with a rare specialty, or a hospital that provides special treatment. Your plan’s network may not include that provider. In such cases, the law requires plans to let you access necessary providers and pay for those special services on the same basis that you would pay a network provider. For such services, check with your plan to get permission ahead of time.
Here is how the bill protects consumers:
When You Shop for Health Insurance
When you shop for a plan, insurers need to explain their out-of-network rules, and give examples of how they calculate reimbursement payments for common out-of-network medical procedures and services. To help you compare costs across plans, the prices in these examples will be comparable to the 80th percentile charge (80th percentile) for each service. The “80th percentile” is a standard that many plans use to decide their “allowable amount.” Generally, it means that approximately 80 percent of charges for a particular procedure in a specific geographic area are equal to that amount or less. FAIR Health’s 80th percentile has been recognized as meeting the requirements of the 80th percentile referenced in the new law and may be used to establish these examples.
When insurers use the same charge in their comparative examples, it helps you understand the difference between what you might pay in plans that use the 80th percentile benchmark and those that use a different percentile, or a different standard such as a percentage of Medicare rates. It also will give you an idea of how much you will pay for in-network care versus out-of-network care. If you expect to get care outside your plan’s network, you should ask your doctor or hospital how much they will charge. Then, you can use your insurer’s example to estimate how much you will need to pay out-of-pocket.
It is important to understand that the 80th percentile charge in these examples is used only to help you compare the financial terms of the plans. By comparing the way the plan calculates reimbursements with the example of a reimbursement based on the 80th percentile, you measure the differences between plans and between in- and out-of-network care. Plans can determine the maximum price that they will accept, as well as the portion of that price that they will reimburse. Each plan can decide the maximum price they will accept from an out-of-network provider, and how much of that price they will pay. But, if an insurer offers an out-of-network benefit, and that benefit is not based on the 80th percentile, you may request a plan option that covers out-of-network services based on 80 percent of the 80th percentile. The premium, deductibles and copays for a plan based on the 80th percentile may be higher than the premiums for plans that insurers regularly offer. Insurers are required to offer these 80th percentile plans, if requested, unless they get an exemption from New York State’s Superintendent of Insurance. Keep in mind that there are many other costs to consider in a plan, like premiums, copays and deductibles. You will want to think about all of these costs when you are choosing a plan, not just the allowed amount.