Health insurance is an essential part of your overall well-being, especially if you make a lot of visits to doctors and specialists. Everybody should have a basic understanding of health insurance, how it works, and why it’s important. There are different types of health insurance that offer different benefits and drawbacks and choosing the right plan for your needs is essential. Below, we’ll break down the five types of health insurance and how they differ. Read on to learn more about HMOs, PPOs, and the various types of health insurance.
Health Maintenance Organizations (HMOs)
A health maintenance organization, or HMO, is essentially a health insurance plan that connects you to a network of doctors, hospitals, and specialists. With an HMO, you must choose healthcare providers and medical facilities that are within your specified network. This means that HMOs provide less freedom of choice, and it also means that you’re required to get a referral from a doctor in order to see a specialist.
The benefit to HMOs is that they’re simple. You don’t have to fill out any paperwork to file a claim, and you can easily find a healthcare provider in your network.
Preferred Provider Organizations (PPOs)
Preferred provider organizations, or PPOs, are the most common type of health insurance. With a PPO, you can see any in-network doctor at your in-network price. You also have the option of seeing out-of-network doctors, but it’s important to remember that you’ll pay more for out-of-network visits. Like HMOs, PPOs require little to no paperwork. The only time you’ll need to fill out paperwork is when you see an out-of-network doctor.
PPOs offer a little more freedom than HMOs because you don’t have to get a referral from your doctor to see a specialist. If you want a nice combination of freedom of choice, affordability, and simplicity, PPOs are a solid choice.
Exclusive Provider Organizations (EPOs)
Exclusive provider organizations, or EPOs, are similar to PPOs in many ways with a few key differences. You get the same freedom of choice with an EPO — you’ll get coverage when you see a doctor in your network, and you don’t need a referral from your doctor to see a specialist. However, EPOs offer no coverage for out-of-network doctors and medical facilities, so you’ll need to pay the full cost if you go out of your network.
EPOs typically offer a lower monthly premium than PPOs, which may make them a more attractive choice for some people. However, it’s important to remember that EPOs don’t provide the same benefits as PPOs if you’re seeing an out-of-network doctor, so that’s something to consider. That being said, EPOs do provide out-of-network coverage in the event of an emergency.
Point-of-Service (POS) Plans
A point-of-service (POS) plan is sort of a combination of an HMO and PPO. You start by connecting with a primary care physician, which is who you’ll see for your checkups and standard appointments. Your primary care doctor can refer you to specialists as needed. As far as paperwork goes, you’ll only need to fill out paperwork if you’re seeing an out-of-network doctor. You’ll also pay more when you see out-of-network doctors.
The cool part about POS plans is that they give you a little more freedom in terms of the primary care provider you choose. If you want the freedom to choose a primary care provider who best fits your needs, POS plans may be a good option.
High-Deductible Health Plans (HDHPs)
With a high-deductible health plan, you enroll in one of the other four types of plans: HMO, PPO, EPO, or POS. Just like any other plan, 100% of your care will be covered when your medical bills reach a certain number. These are known as out-of-pocket costs. With HDHPs, out-of-pocket costs are typically higher than with other plans, which means you may have to pay more out of pocket.
HDHPs are typically more affordable than other plans in terms of your monthly premium, but you’re responsible for paying all care costs until you reach your deductible. The providers you’re able to choose from will vary based on what type of HDHP you have.
Health Savings Accounts (HSAs)
You might also have a health savings account (HSA) tied to your HDHP. A health savings account is essentially an account that you contribute money to; this money is not taxed upon contribution. You can use funds from your HSA to pay for medical care before you reach your deductible, and the money won’t be taxed when you spend it either. In order to have a health savings account, you must also have an HDHP.
Choosing the Right Type of Health Insurance
Different types of health insurance offer different pros and cons but choosing the right type of health insurance is essential. Take some time to compare your options in terms of health insurance plans and find something that works for your budget as well as your healthcare needs. When it comes to health insurance, choosing the right plan can make a world of difference.
What to Do Next
If you’re still deciding on the right type of health insurance for you, now is the time to get insured. Take your time to figure out which health insurance plan is right for you and get enrolled as soon as you get a chance. You never know when you’re going to need health insurance, so now is the best time to get it.