What Patients With Cancer Need to Know About Selecting a Health Insurance Plan

A cancer diagnosis can be an overwhelming experience, making it difficult to understand what’s next. To add to the mix, insurance coverage can also be confusing, but plays a vital role in a patient’s journey. Therefore, it is key for patients with cancer, and their caregivers, to understand their options when it comes to health insurance, and components they should keep in mind when picking a plan.

CURE spoke with Monica Fawzy Bryant, chief operating officer of Triage Cancer, about health insurance options and what patients with cancer need to know.

CURE: Why is it important for patients to understand how to pick an insurance plan?

Bryant: When we talk about financial toxicity, a big piece of that puzzle is the out-of-pocket costs that can come with a cancer diagnosis and the resulting treatment. We also know that if people are knowledgeable about the differences between plans, and then how to make choices between the different plans, they're more likely to pick an appropriate plan for them that's going to cover the doctors and hospitals that they go to; any prescription drugs that they are taking; and also, if they are eligible for financial assistance in the marketplace or through Medicare, that they're accessing those assistance options. We know that if people are able to pick appropriate plans for them, and then plan around those out-of-pocket maximums, they can significantly reduce financial toxicity.

CURE: Can you discuss the types of insurance plans that patients can pick from?

Bryant: We have two main payment models in this country: fee-for-service, which means the provider gets charged for each service they perform, and managed care, which is where your care is managed by an insurance company. And those insurance companies will contract with providers to be part of their network for that specific plan. The providers agree to take a specific amount for certain services, and that amount is called the contracted amount, sometimes the allowed amount.

The difference between those HMOs and PPOs is primarily around networks and cost. Health Maintenance Organizations, or HMOs, have small networks of providers typically under one hospital system umbrella, and most HMOs require that somebody start their care with a primary care physician. For example, if someone has nasal congestion they start with their primary care physician, if that provider cannot solve the issue, they refer the patient to a specialist. So with HMOs, there's less choice among providers and additional steps to access specialty care, in exchange they cost less. There's typically no out-of-network coverage with HMOs. So you have to stay in the defined network.

Then there are PPOs, or preferred provider organizations. PPOs have a larger network of providers many times across different hospital systems. And you don't have to start with a primary care physician. So I could go straight to that specialist if I wanted to. In exchange for more choice and more flexibility, you pay more. And many PPOs also have some out-of-network coverage. So, if you go out of network, they'll cover at least a portion of the services, for example, at maybe 50%.

Oftentimes patients will ask, “Which is better?” And the answer is, it depends. There are some places in this country where the HMOs are great. And if someone is relatively healthy and typically only sees their HMO approved doctor for their annual check-up, that might be a great option to keep costs down. However, for someone with a serious medical condition, like cancer, who may see several different specialists, a PPO may be the more appropriate option.

Now, there are other models that are a hybrid of HMOS and PPOs. For example, exclusive provider organizations have a larger network of provider than most HMOs, but will have no out-of-network coverage. However, with most EPOs you don't have to start with your primary care physician. The costs for EPOs are typically between those of an HMO and PPO.

CURE: Can you go through some terms associated with health insurance and how they impact a plan?

Bryant: There are many terms that are helpful to understand to effectively navigate health insurance. Starting with the terms around the cost of health insurance: the monthly premium is the amount that you're going to pay every month just to have health insurance, whether you see the doctor or not. So, it's very similar to having car insurance all year but never filing a claim.

Now, when somebody starts to access medical care and use their insurance, there are other costs. The deductible is a fixed dollar amount that someone has to pay out-of-pocket each year before their health insurance company starts picking up their share of the costs. Now, this is going to totally be dependent on plans. So, some plans have a $0 deductible, some have a $5,000 deductible.

Once the deductible is paid, the insurance company covers a percentage of your health care costs and the individual cover a percentage. This is called cost-share or coinsurance because they are literally sharing the cost. The cost-share will also depend on plan. For example, plans with a 60/40 cost-share mean that once the deductible is paid, the health insurance company will cover 60% of the person’s medical costs and the individual is responsible for 40%.

Then many plans have another payment called a co-payment. This is a payment that you have to make before you receive a specific service. For example, a $25 co-payment to see the doctor or a $10 co-payment for generic prescription drugs.

Finally, the out-of-pocket maximum is one of the most valuable things for someone to understand about their plan, because in a worst-case scenario, it is the most that someone is going to pay out of pocket for their health care costs that year. And the way you get to that out-of-pocket maximum is a math problem. You add up everything you pay towards your deductibles, your co-insurance, your co-payments to get to that out-of-pocket maximum. The specific amount for an out-of-pocket maximum is going to depend on the plan. The reason understanding this is so helpful, is if you're shopping for insurance, you can look at that out-of-pocket maximum, and actually plan for it. So if your out-of-pocket maximum is $7,000, and you know you're in cancer treatment, you know that $7,000 should be the most that you have to pay for the year for your care.

All of these costs should be laid out in a document you have access to before you purchase a plan called a Summary of Benefits of Coverage, or an SBC.

CURE: After a patient picks a plan, what are some prescription drug terms they should know when it comes to their treatment?

Bryant: Insurance policies have a formulary, which is the list of drugs that the insurance company covers. Formularies are typically broken down into tiers or levels. For example, tier 1 drugs often include generic medications whereas Tier 5 could be specialty drugs. Many times, cancer drugs fall into that specialty tier.

The reason it’s valuable to understand how the formulary works is, depending on what tier the drug is in, it could cost you something different. For example, your plan imposes a $10 co-payment for the generic drug you take but a 20% co-insurance for the specialty drug. So if you're talking about a $10,000 drug, 20% is a significant amount of money.

It's also helpful to understand where the drug fits into the formulary and to make sure, whenever possible, that the drugs you are taking are in that formulary. And where we see people get really tripped up is you're typically picking a plan for the year coming. With cancer treatment, you might be on a different drug next year. It can be helpful to talk with health care providers around your open enrollment period to see if they can anticipate any drugs that they might be taking next year. Of course this isn’t fail proof, because it’s not always possible to anticipate future needs. But to the extent that treatment is foreseeable, making sure those drugs are on the formulary for the insurance policy that you pick can go a long way in preventing financial toxicity.

CURE: What questions should patients keep in mind when it comes to finding the right insurance plan for them?

Bryant: There are three main questions to ask: What's it going to cost? And so understanding the premium, the deductible, the copayments and then the out-of-pocket maximum. Are my providers (e.g., doctors, hospital, labs, pharmacy, etc.) in the plan’s network? And are the prescription drugs I take included in the formulary, and what is the payment structure.

CURE: Are there resources patients can reference to help them pick a plan?

Bryant: Triage cancer has lots of different resources. We have a quick guide that outlines the various options for health insurance, and how to make those choices. We have two animated videos that might be useful. We have one on health insurance basics that goes through the terms that I just talked about. And then we have one on how to pick a plan that walks through, if you have multiple options, how do you understand what the plans actually going to cost? And those are approximately five minutes long, in English and Spanish with subtitles. So for someone feeling lost and overwhelmed, those may be a great place to start. Finally, we have a webinar archived on our website that someone can watch any time.

CURE: What is your biggest piece of advice for a patient who needs to sit down and pick a plan?

Bryant: It’s hard to pick just one! First, make sure you understand the terms I’ve discussed and that you have communicated with your health care team about what the year ahead is going to look like. Second, really explore all of your options and don’t just assume that a plan offered by your employer is the best option. Ultimately, we want people to be savvy consumers of health insurance in the same way we are with other thing we buy.

CURE: Is there anything else we should know?

Bryant: Health insurance is only one piece of the puzzle. Understanding employment rights, disability insurance, and other financial topics can be incredibly helpful. But we know it’s overwhelming. That is why Triage Cancer has worked hard to create opportunities for individuals who have been diagnosed, their caregivers, and health care professionals to learn more about the legal and practical issues that come up. It is also why we are so thankful for wonderful partnerships with groups like Cure!