Workplace Benefits
4 Different Types of Health Insurance Plans
There’s a lot to consider when choosing a health insurance plan. Generally, the decision comes down to your current medical needs, how much you’re willing to spend, and what expenses you need covered. Ahead, get a better idea of what some of the most common insurance plans have to offer.
HMO
One of the most common health insurance options is a health maintenance organization or HMO. This type of insurance provides medical services via a network of physicians, hospitals, and healthcare providers.1
With an HMO plan, you’re required to seek medical services within the existing network. HMOs typically don’t offer out-of-network coverage. If there’s an emergency, and you receive medical services at an out-of-network hospital, an HMO plan typically covers those expenses at in-network rates, but you can still be charged by non-participating doctors who treat you at that facility.
HMO participants choose a primary care physician for basic healthcare needs. This physician is responsible for coordinating healthcare services, and ensuring that any specialist is within the plan’s network. Under an HMO, you typically need a referral from your primary care physician to see one of these specialists.
PPO
Another common type of health plan is preferred provider organizations or PPOs. Much like HMOs, PPOs come with an approved network of healthcare providers.
Unlike HMOs, PPOs often provide coverage for medical services rendered outside of the network. However, you should expect to pay more out-of-pocket costs than you would if you stayed within your plan’s network of approved physicians.2
PPOs don’t require you to choose a primary care physician and may allow you to see a specialist without needing a referral. This added flexibility in choosing healthcare providers does come with a cost. PPOs typically include higher monthly premiums than HMOs.
EPO
An exclusive provider organization or EPO, offers a network of doctors and hospitals to choose from. They typically have lower monthly premiums than PPO plans but have more restrictions. Out-of-network coverage is only covered for emergencies, for example.
In addition to lower copays and deductibles, EPOs don’t always require you to establish a primary care physician, and you can see in-network specialists without a referral.
POS
A point of service plan, or POS, is a type of health insurance plan that requires you to choose a primary care physician. Generally, a primary care physician coordinates your healthcare within the approved POS network, and specialist referrals are required.
You still receive some coverage if you visit an out-of-network physician, but you’re subject to a deductible and higher upfront cost. Under a POS, you typically pay less in monthly premiums than you would with a PPO.
How to pick your health insurance
Choosing the “best” type of health insurance all comes down to what works for you. There are no one-size-fits-all solutions when it comes to choosing a health plan but considering your personal healthcare needs can provide some clarity.
For example, if you have a preexisting condition or require ongoing treatment, you might want a plan with more extensive and flexible coverage. If you’re a relatively healthy person, you may decide a plan with lower monthly insurance premiums is the best choice.
The number of dependents you have also plays a significant role when deciding on types of medical insurance. If you have young children or elderly family members in your care, you may want a plan that covers pediatric or long-term geriatric care.
In short, there are benefits and drawbacks regardless of which plan you choose. So it’s a good idea to take a close look at your own needs and budget restrictions before making this important decision. With the right type of insurance, you can rest easy knowing you and your loved ones have their healthcare needs covered.