Benefit Cost Scenarios
To give you a better idea of how our plans work, here are two hypothetical examples of using the PPO plan and the HMO plan in an everyday situation. These are examples of medical care expenses; actual costs may differ based on the specific care you receive, your provider’s charges, and other factors.
A PPO Plan in Action
- Sam has a sore throat and makes an appointment with her PCP. After an examination and a lab test, the provider diagnoses Sam with strep throat and prescribes an antibiotic.
- Sam picks up the prescription at the pharmacy, and pays $50 using her HSA funds. She pays for the full price of the prescription because she hasn’t met her deductible yet.
- Later, Sam gets two bills: $200 for the provider visit and $150 for the lab test. She pays for these with her HSA, too. These expenses are applied toward her deductible.
After the deductible is met, this scenario changes:
- Sam’s plan covers 80% of eligible costs, so Sam pays $40 to visit her PCP, not $200, and $30 for the lab test, instead of $150.
- Sam now pays the generic prescription maximum copay for her medication, which is $10.
After Sam reaches the out-of-pocket maximum, all eligible, in-network costs are covered.
Key differences from the HMO:
- Sam spends more up front for services and has a higher deductible, but she pays less per paycheck.
- Blue Cross contributes more to Sam’s HSA, compared to the HMO’s HRA. Plus, any unused money left over at the end of the plan year is rolled over into the next year, with potential growth from interest or reinvestment.
An HMO Plan in Action
- Sam has a sore throat and makes an appointment with her PCP. After an examination and a lab test, the provider diagnoses Sam with strep throat and prescribes an antibiotic. Sam pays a $35 copay for the visit, using funds from her HRA
- Sam picks up the prescription at the pharmacy, and pays a $15 copay out of her HRA.
- Later, Sam gets a $150 bill for the lab test. Since she hasn’t met her deductible, she uses money from her HRA to pay. The payment is applied toward her deductible.
After the deductible is met, this scenario changes:
- Sam still pays the $35 copay to see her PCP but she no longer pays for the lab test.
- Prescription costs remain the same.
After Sam reaches the out-of-pocket maximum, all eligible, in-network costs are covered.
Key differences from the PPO:
- Sam spends less up front for certain services and has a lower deductible, but she pays more per paycheck.
- She receives a smaller contribution from Blue Cross to her HRA, compared to the PPO’s HSA, and can’t contribute her own funds.
