Types of Health Insurance – Forbes Advisor

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When shopping for health insurance, it’s easy to get lost in an alphabet soup of plan types: PPO, HMO, EPO – what does it all mean?

These are all acronyms for types of benefit designs for health plans. The design of plan benefits dictates how you get care and affects the cost of health insurance. Understanding the differences between these plans is critical to finding the best health insurance plan for you at an affordable price.

What is a PPO?

A Preferred Provider Organization (PPO) health plan offers the flexibility to receive health care outside of your provider’s network and see a specialist without a referral from a primary care provider.

Getting care outside of your provider network gives you more choices than other health plans, but that freedom comes at a price. Out-of-network care usually costs more than if you get in-network care.

PPOs also typically have higher health insurance premiums than other insurance plans.

What is an HMO?

Members with health maintenance organization (HMO) coverage are limited to seeing network providers who either work directly for the HMO or contract with the HMO. Typically, your primary care physician coordinates most of the care you receive when you have an HMO. For example, you will most likely need a referral to see a specialist.

An HMO will not cover your care if you go outside the plan’s network unless you need emergency care.

HMO plans typically have lower health insurance premiums than other types of health insurance, but those savings come with a strict provider network.

What is EPO?

In an exclusive provider organization (EPO) plan, you are covered only if you use doctors, specialists, or hospitals within the plan’s network, although you will be covered for emergency care regardless of the provider’s network membership.

Unlike an HMO, you probably won’t need a referral to see a specialist. Also, unlike HMOs, physicians do not work for or contract with EPO. Instead, the EPO negotiates lower rates with providers that are passed on to policyholders when you need health care services.

With an EPO plan, you typically pay less in premiums than in a PPO plan, but more than you would pay in an HMO.

What is POS?

A point-of-service (POS) plan has aspects like a PPO but others similar to an HMO. POS members pay less for their care when they visit a medical provider in the plan’s network.

However, they can also seek out-of-network care. You will need a referral to receive care outside the plan’s network and pay additional costs to use this type of provider.

A referral to a specialist is also required.

What is an HDHP?

A high-deductible health plan (HDHP) has an annual health insurance deductible of at least $1,400 for an individual or $2,800 for a family in 2022. A plan considered high-deductible will increase to $1,500 for an individual and $3,000 for a family in 2023 Mr.

Your total annual out-of-pocket costs for network services for a high-deductible plan cannot be more than $7,050 for an individual or $14,100 for a family in 2022. In 2023, your out-of-pocket maximums will jump to $7,500 for an individual and $15,000 for family coverage.

HDHP premiums are generally low, but the high deductible means your out-of-pocket costs can be high if you need regular medical care in a given year.

One of the big advantages of an HDHP is that you can pair it with a Health Savings Account (HSA), which allows you to save and pay for medical services tax-free.

Unlike other types of plans, a high-deductible health plan is not a benefit design. Strict means you have a high deductible. HDHPs can actually be any type of benefit design—PPO, HMO, EPO, or POS.

What is the best type of health insurance?

There is no single best type of health insurance. Each plan has its pros and cons, and the right plan depends on what you need from health insurance coverage.

Comparing and contrasting different plan types can give you a better idea of ​​which type of benefit design makes the most sense for you.

Comparison of PPOs vs. HMOs

  • PPOs generally have higher premiums than HMOs.
  • PPOs offer more flexibility in seeing doctors and hospitals than HMOs.
  • HMOs require you to get a referral to see a specialist, while PPOs do not.
  • HMOs exclude most out-of-network care from coverage, while PPOs will cover some portion of out-of-network costs.

Comparison of PPO vs. EPO

  • EPO plans generally have lower premiums than PPOs.
  • EPO plans typically do not pay for out-of-network care, while PPOs pay a portion of those costs.
  • PPO plans allow you to see more doctors and hospitals than EPO plans.

Comparison of PPO vs POS

  • Both PPO and POS plans allow you to go out of your network for care, although you will likely pay more for that care than if you stayed in network.
  • A PPO plan does not require a referral to see a specialist, but a POS plan will likely have one.
  • A POS plan will likely have lower premiums than a PPO plan.

Comparison of HMOs vs. EPOs

  • HMOs often have lower premiums than EPOs.
  • Neither HMOs nor EPOs cover most types of out-of-network care.
  • HMOs require you to get a referral to see a specialist, while EPOs do not.
  • EPOs negotiate lower rates with network providers, while HMOs have providers who either work for or contract with the HMO.

Comparing HMO vs. POS

  • POS plan members can seek out-of-network care, while those in an HMO are generally not covered by out-of-network care.
  • Both POS plans and HMOs require you to get a referral to see a specialist.
  • Both HMO and POS plans generally have lower premiums than PPOs.

Comparing EPO vs POS

  • An EPO usually doesn’t allow you to seek out-of-network care, while a POS can offer this coverage.
  • EPOs are unlikely to require a referral to see a specialist, while POS plans will have this requirement.
  • Both EPO and POS plans generally have lower premiums than PPOs.

How much does health insurance cost?

The cost of health insurance in the Affordable Care Act (ACA) marketplace varies by type of health plan, age and number of people covered. Here are the average premiums for PPOs, HMOs, and EPOs in the ACA marketplace.

Average health insurance costs by type of health plan

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