Comparing Penn State's PPO Blue and PPO Savings health care benefits plans

This is the fourth in a series of Penn State Today articles exploring the process of crafting the 2018 health care benefits plan design and cost sharing for Penn State. Follow these links to the first, second and third articles in the series.

When choosing the health care plan that best meets the needs of employees, one consideration is out-of-pocket expenses. The amount of money a person spends each year on medical benefits varies depending on how much medical care they need and the health insurance plan they choose. The following will help our faculty and staff members to differentiate between Penn State’s PPO Blue and PPO Savings plans. Taking a few minutes now to review the features of each plan will help participants to choose the most effective plan for themselves and their families during benefits open enrollment this November.

Traditionally, only a small number of Penn State’s faculty and staff members choose a different health plan each year.

However, a 2015 survey of those enrolled in the University’s health care plans showed that 33 percent of respondents indicated that they didn’t want to take the time to compare options; yet, 72 percent of participants stood to save money if they had switched to the PPO Savings plan, rather than remaining on the PPO Blue plan. Below, we provide the basic facts about both options.

Two plans: What’s the difference?

While the two Penn State plans – PPO Blue and PPO Savings – share the same provider network and cover the same medical services, they differ in the way a plan member’s out-of-pocket expenses are structured.

Watch this video for a quick comparison.

Understanding definitions and how they impact each plan

(Full definitions of all terms used in the following chart are included below. Click on or select the image below to see an expanded version. This content is available in an alternative format here.)

Payroll or Premium Contribution

The health care payroll or premium contribution for both plans is calculated as a percentage of each employee’s annual salary. Members of the Teamsters’ Union have different payroll contribution rates as per their contract.

Deductible

A deductible is the set dollar amount that members pay for non-preventive care expenses – such as doctor’s visits related to sickness or injury. The deductible must be met before insurance starts to pay a portion of health care costs.

Ultimately, the amount each individual or family will pay for these services depends on three things:

• Selected plan (PPO Blue or PPO Savings)
• Enrollment tier (which indicates which or how many family members are on the plan. The tiers include individual; two-person; parent & child(ren); and family).
• Use of in-network or out-of-network health care providers. Out-of-network providers will cost more.

Coinsurance

With both the PPO Blue and PPO Savings plans, once the deductible has been met for the year, Penn State pays 90 percent of claims and faculty and staff pay the remaining 10 percent.

When a person’s coinsurance payments reach the out-of-pocket maximum for that year, any remaining claims for that year are paid by Penn State at 100 percent.

Copayments

A copayment is a fixed payment that a plan member pays each time they (or family members covered by their plan) receive medical care. Copayments do not count toward deductibles. The PPO Blue plan has copayments, while the PPO Savings plan only has deductibles and coinsurance.

Note: The $20 PPO Blue copayment is waived for Penn State employees and their insured dependents who visit a Centre County Hershey Medical Group Provider for a primary care office visit. To see a list of Hershey Medical Group providers in the University Park area, go to http://ohr.psu.edu/pshmg/.

Risk tolerance

As faculty and staff begin considering decisions about health plan selection ahead of this November’s benefits open enrollment period, another key consideration should be their ability and willingness to take on more financial risk.

Plan participants must choose between the more predictable, but higher, fixed costs of the low-deductible PPO Blue plan, and the more variable costs of the PPO Savings plan.

Determining your comfort with either scenario can help you make the best decision for you and your family.

For those with chronic conditions

Those who have been diagnosed with one or more of the chronic conditions of high-blood pressure, high-cholesterol, or type 1 or type 2 diabetes can enroll in the Value-Based Benefit Design (VBBD) program, which only is available through the PPO Blue plan. The program encourages individuals to manage these health conditions by keeping their out-of-pocket expenses low. For those enrolled in the VBBD program, all office visits, lab work and medical supplies related to these conditions are covered at 100 percent with no copays or coinsurance. It is important to compare costs under both plans in determining which plan is the better option for each individual and family. To learn more about the VBBD program, visit http://ohr.psu.edu/content/value-based-benefit-design-0.

For more information about the differences between the PPO Blue and PPO Savings plans, visit http://ohr.psu.edu/benefits/insurance/health. Additional information and communications will be shared with faculty and staff as this November’s benefits open enrollment period approaches.