It’s good to have choices when it comes to health insurance that way you can find one that best suits you as an individual or you and your family. While there are a variety of health plan options to choose from, the most common plan types are an HMO, PPO, HDHP and EPO. Generally speaking, the difference in most health plans includes the size of the plan network, the ability to see specialists, the plan costs and the coverage for out-of-network services. Let’s take a closer look at each plan type to see how they’re alike, how they differ, and how you can choose the type of plan that meets your needs.
HMO is a health maintenance organization plan. With an HMO plan, you have to stay in your provider network when seeking doctors and hospitals for care. In addition, you must have a referral to see a specialist. An HMO network is made up of providers that have agreed to lower their rates for plan members and also meet quality standards. Care under this plan typically has more restrictions for coverage than other plans, such as allowing only a certain number of doctor visits, tests or treatments.
Key Points About HMO Plans:
- Some plans may require you to select a primary care physician (PCP), who will determine what treatment you need.
- With some plans, you may need a PCP referral to be covered when you see a specialist or have a special test done.
- If you opt to see a doctor outside of an HMO network, there is no coverage, meaning you will have to pay the entire cost of medical services.
- Premiums are generally lower for HMO plans, and there is usually no deductible or a low one.
With a PPO Plan, also known as a Preferred Provider Organization, you get more flexibility to see specialists and doctors in-or-out of your network, but it often comes at a higher monthly premium. A PPO plan allows you to choose when and where you seek health care without the need of a referral. A PPO plan gives you increased flexibility and allows you to bypass seeing a primary care physician every time you need specialty care. So, if you are a heavy healthcare user or have a large family, the flexibility of a PPO plan may be worth it.
Key Points About PPO Plans:
- You can see the doctor or specialist you’d like without having to see a PCP first.
- You can see a doctor or go to a hospital outside the network and you may be covered. However, your benefits will be better if you stay in the PPO network.
- Premiums tend to be higher and it’s common for there to be a deductible.
More employers are offering HDHPs (High Deductible Health Plans), alongside traditional health plans (HMO and PPO) – this is part of a trend that gives employees more choices. If you’re young, healthy and rarely go to the doctors, an HDHP may be a good fit. The monthly premium is lower, but the deductible is higher. What does this mean? Basically, you pay less each month, but if you do need care, you end up paying more of that cost on your own before the insurance company starts to help.
An EPO is an exclusive provider organization plan. It’s kind of a hybrid of an HMO and PPO. This health plan offers a local network of doctors and hospitals for you to choose from and a referral is not needed for a specialist. An EPO is usually more pocket-friendly than a PPO, however anything out of network is not covered. If you’re looking for lower monthly premiums and are willing to pay a higher deductible when you need health care, you may want to consider an EPO plan.
In the end, it’s not really a question of which plan is better, but which plan is best for you. Consider the pros and cons of each plan, along with your particular situation. With any plan, check the provider network to see if your preferred providers are in the plan’s network, since staying in-network will save you money. Have questions on which plan is right for you? Download our guide to selecting a health insurance plan or give us a call to learn more.