In the United States, there are several different types of health insurance plans. To understand which plan fits you and/or your family best, there are a few questions you can ask yourself. For example:
- Are my doctors in the plan’s network?
- What’s my tolerance for out-of-pocket expenses?
- Am I comfortable with needing a referral from my primary care doctor to see a specialist?
Once you have an idea of your healthcare needs, you can start to see which plan is right for you:
- Preferred Provider Organization (PPO) Plan: PPO plans usually have a larger provider network but the highest monthly costs or premiums. You are not required to have a referral from your primary care doctor (PCP) in order to see a specialist and sometimes, out-of-network care is covered. Emergency care out-of-network is covered. However, you get the highest value from your insurance by going to a provider in your insurance plan’s network.
- Health Maintenance Organization (HMO) Plan: HMO plans operate through a managed care system where there is a restricted network of providers you can see. These provider networks are contracted to accept lower rates for participating members; thus, HMOs tend to have lower monthly premiums. However, you will typically need a referral from your PCP to see a specialist and the plan only covers out-of-network care in an emergency.
- Point of Service (POS) Plan: POS plans are a cross between a PPO and HMO plan. Monthly premiums vary depending on the plan. The provider networks in POS plans are not restrictive but you typically pay less when you seek in-network healthcare providers. Just like HMOs, POS plans most often require you to get a referral from your PCP who is the “point of service” to see a specialist.
- Exclusive Provider Organization (EPO) Plan: EPO plans are a type of managed care plan where you may only use providers in your plan’s network. However, this network is larger than that of an HMO. Monthly premiums vary but are usually between the cost of an HMO and PPO. You typically do not need a referral to see a specialist but out-of-network coverage is not available except in an emergency.
PPO plans are ideal for people who see multiple specialists, have high healthcare usage, and like the option of seeing a specialist without going to their PCP.
HMO plans are ideal for people who are generally healthy, do not go to the doctor often, and prefer to pay less for monthly premiums.
POS plans are ideal for people who may have one or two health conditions, prefer a PCP coordinating their care, and would like the flexibility to see doctors who are not in their network.
EPO Plans are ideal for people who may need a larger network, don't want the hassle of going to their PCP for a referral, and like the lower price tag than that of a PPO.
High-deductible health plans (HDHPs) are plans with higher than normal deductibles and out-of-pocket maximums. For 2023, the minimum eligible deductible is $1,500 for an individual and $3,000 for a family. The plans that meet these requirements are Health Savings Account (HSA)-eligible, meaning its consumers may contribute pre-tax money (up to $3,850 in 2023 for an individual) to an account that can be used to pay for future healthcare expenses. HSA funds are invested much like 401k savings are; many financial planners suggest that HSAs can be a very effective way to save and invest for future unexpected or uncovered healthcare costs if your healthcare costs are low enough that you don’t have to tap into the account.
*The general features listed above are not always representative of the plan type. Please check with your benefit plan administrator for the specific features of your plan.
Which plan is best for you? If you’re looking to make a smart, comprehensive decision based on your healthcare needs and financial situation, Caribou is here to guide you.
Learn More:
HMO, PPO, EPO or POS? Choosing a managed care option | healthinsurance.org
Last Revised January 2nd, 2023
