By Jeff Levine WebMD Features

Reviewed By Gary Vogin, MD

March 22, 2001 -- How well do you understand your healthcare plan? Could you answer these four simple questions?

• Are you required to sign up with a primary care provider?
• Do you have to choose providers from a list or network of providers?
• Does your plan cover any of the costs for going outside the network?
• Are you required to receive a referral or plan approval for specialty care?

If you didn't know the answers to all of those questions, you're not the only one. One study, which was more like a quiz in Managed Care 101, found that only 30% of nearly 11,000 patients tested answered all the questions right.

That result doesn't surprise attorney Jack Marshall. "I only know what's in my plan because lately I've had to use it a lot, and otherwise, I was just completely ignorant of it," he tells WebMD. "I was an executive director of a healthcare organization, and I still am ... relatively ignorant."

Marshall gives his policy, a physician provider organization or PPO, high marks for allowing doctor choice outside a list and access to specialists without referrals. "I think the idea is that you put some burden on the consumer so the consumer isn't just running around, running to the emergency room every time you get a splinter," he says.

However, Sumiko Wright says her PPO is too restrictive.

"I think I know enough to know that it doesn't cover what I need, and what I need is acupuncture," she tells WebMD. Sumiko says she ignored her primary care physician's recommendation for correcting a dislocated shoulder and found better relief through alternative medicine.

"These [four questions] are really the basics ... so the fact that only 30% correctly answered all four definitely tells us that people really don't in general understand the fundamentals of health plans," says Peter Cunningham, PhD, senior researcher for the Center for Studying Health System Change and the lead author of the study published in the March/April 2001 edition of the journal Health Affairs.

To make sure the responses were accurate, the researchers took the answers back to the health plans and matched them up in a direct comparison to the actual benefits.

Most surprising was the misperception about the need for specialty care referrals. Some 62% of the family members polled said their plans required approval, but their managed care plans said only about 28% of the insured needed such authorization.

"That finding was pretty dramatic. I think the magnitude of the discrepancy was perhaps surprising to us. It either means that people ... just think that there's restrictions on access to specialists that simply don't exist ... or it may be that there are more subtle aspects of getting access to care," Cunningham tells WebMD.

On the plus side, 80% of those surveyed answered correctly that their plan had a network. Some 69% knew that the HMO covered some out-of-network expenses. Seventy-three percent understood they had to sign up with a "gatekeeper," or primary care provider.

One take-away point of the study, Cunningham says, is that even though managed care has become the most popular way of getting healthcare, it has changed so much in the 1990s that the evolving system is a far cry from the original cost-saving approach. Now many patients can choose to go outside the plan, if they're willing to pay for the privilege.

"There's a need for patient education. Most of these enrollees are getting coverage from their employers, so to some extent the onus is on the employers to supply information," Cunningham says.

That kind of detail may not seem important when you're healthy, but it can make a life and death difference if you have a severe illness and need specialty care outside the network.

"Be your own advocate. Don't make assumptions that there are restrictions, especially when it comes to specialty care, [where] there was that huge [understanding] gap. Ask questions; learn about your rights to appeal decisions," Gail Shearer, MPP, director of health policy analysis at Consumers Union, tells WebMD. Consumers Union also publishes Consumer Reports.

Shearer's suggestions for checking your current plan:

• See if you can get out-of-network care.
• Know if there is a cap on benefits or additional catastrophic coverage.
• Check to see if the plan's fee schedule, which lists how much the plan will pay for procedures, actually covers the locally prevailing charges.
• Find out which services, such as prescription drugs, are excluded.

"You want to make sure it's not a skimpy policy," Shearer says. However, since most of us only have one option offered by our employer, she says it's critical to read the policy's fine print. You might consider buying additional coverage. It's not that expensive.

Ron Pollack, who heads the consumer advocacy group Families USA, suggests providing ombudsman programs to help patients sort through the maze of their health plans' rules.

Susan Pisano, spokeswoman for the American Association of Health Plans, says the study shows that managed care's detractors often miss the point -- namely, that the services they're demanding are being provided already. On the other hand, she says, the plans could do a better job of informing their members.

"People in our community have been working to build programs that some would call Ombuds-programs for quite sometime. [We] have been looking for quite sometime to find the ways that will be most helpful to people in trying to learn about their health plans and how to use them," Pisano says.

For an outline of questions to ask your benefits' specialist, WebMD turned to Pat Schoeni, a spokeswoman for the National Coalition on Health Care:

Basic Questions:

• Do I need a primary care provider (called PCP or "gatekeeper")? This typically is a family medicine or internal medicine physician.
• Do I need a referral to see a specialist? If you are required to choose a PCP, your plan probably will require the PCP's referral before you can see a specialist.
• Do I need to choose my PCP or any specialists from a network? Managed care plans typically publish lists of doctors who are part of the network.
• If I choose a doctor who is not in the network, will my plan cover those services? What percent is covered?
• Do I need prior authorization for hospitalization?
• Is there a specific hospital I must use for nonemergency care?
• Are services at urgent care facilities covered?
• What are the co-pays and deductibles that I will have to pay up front?
• Is there any waiting period before insurance goes into effect? Is there any waiting period for kind of specific coverage for pre-existing illnesses or diseases?
• Is there prescription drug coverage? What percent of drug costs are covered? What is the co-pay? Are only generic brands covered? Where do you have to go to get prescriptions filled?
• Some HMOs require using mail order houses for medications taken regularly because mail order programs reduce costs. Is there an emergency clause for mail order prescriptions?
• Is there catastrophic coverage (preferably $1 million) in case I have a serious accident?
• What about flexible benefit plans? These are health-related services funded by your regular pretax contributions -- by payroll deduction -- and are not part of a managed care or insurance plan. Optometry and dental services are often covered through flexible benefit plans. Your contributions accumulate during the plan's year. Just remember: If you don't spend that money by the end of the year, you lose the money.

Family Planning:

• Are dependents covered? What is the cost of that coverage, co-pay amounts, deductibles for the whole family? If you are a single woman and become pregnant -- and your plan does not offer dependent coverage -- the plan must (under federal law) cover your hospital care and delivery of the baby, but you may need to find a separate policy for the baby.
• When can I make changes in my plan? By federal law, you are allowed to change your plan when certain life events occur, like a change in marital status or birth of a child.
• When can I change to a different plan? If you joined your plan through your employer, you must wait for the yearly "open season" to change plans.

After Forty:

• Are preventive services -- like mammogram, prostate-specific antigen (PSA) test, and colonoscopy -- covered? Many plans do not cover these.
• Is there a cap on certain services, like mental health or alcoholism treatment?
• Is there a lifetime cap on total benefits? With some plans, the lifetime cap can be so low that one quadruple bypass surgery will go over the limit. People with more than one chronic disease should be aware of this.