It’s always good to have options. And when it comes to health insurance, you definitely have them. To help you make sense of the different types of health insurance available to you, we’ll go through some of the ways health plans are usually classified, and explain a bit about each type.
By Provider Network Type: HMO, PPO, POS and EPO
PPO, HMO, POS, EPO… That’s a lot of three-letter acronyms. Generally, when talk about insurance plan types involves acronyms like these, we’re breaking down managed care plans by the type of provider network they have. Managed care plans are different than traditional health insurance plans, where you’d see any doctor you wanted, pay the doctor, and be reimbursed for a portion of the cost of care. Managed care plans try to control costs while maintaining quality of care. One way to do this is to build a network of providers that agree to accept lower fees in exchange for access to patients in the network. Because health care costs continue to increase, managed care plans and their cost control measures have become increasingly popular. Here are some common network/plan types:
HMO plans feature low costs (e.g., lower premiums and lower or no deductible), but there are certain restrictions in the providers you can see. Typically, care is only covered if you see a provider within the HMO network (with exceptions like emergency care) and there are restrictions that limit coverage to a certain number of visits, tests or treatments. Additionally, you may be required to choose a primary care physician, who will coordinate care and refer you to specialists.
Read more details on HMO plans here.
PPOs are extremely popular, because they offer more flexibility than HMO plans. There’s still a provider network, but you will usually have coverage for out-of-network services as well, though the cost to you will be higher. You won’t need to select a PCP, and no referrals are necessary to see specialists, though you’ll spend less when you see in-network specialists. The tradeoff for this flexibility is higher premiums and deductibles than with HMO plans.
Read more details on PPO plans here.
While sharing characteristics with HMO and PPO plans, POS plan benefits can vary depending on whether you receive care in network or out of network. Similar to an HMO plan, you are most likely required to choose a primary care physician (PCP) who will provide referrals to specialists when necessary. Care provided by your PCP is usually not subject to a deductible. Preventive care benefits are also typically included. But like a PPO plan, you may receive care outside of your network if you don’t mind paying higher out-of-pocket costs. If your PCP makes a referral to an out-of-network provider, the costs are most likely fully covered.
Additional key points about POSs:
- You must be willing to coordinate your care through a PCP
- It’s best to choose a PCP who already participates in the network
Very similar to an HMO plan, an EPO is a type of insurance plan that requires you to use doctors and hospitals in the network, with the exception of emergency care. But unlike an HMO, you do not have to select a Primary Care Physician, nor do you need a referral to see a specialist.
Additional key points about EPOs:
- You can see the doctor or specialist you like without a referral from a PCP.
- If you choose to see a doctor outside of the network, you may have to pay the entire cost of medical services.
By Metal Tier: Platinum, Gold, Silver and Bronze
The Affordable Care Act established levels or tiers for individual health insurance plans so that buyers understand what their potential costs for medical care may be and to provide side-by-side comparisons. The tiers available include Platinum, Gold, Silver and Bronze.
It’s important to note that metal tier isn’t an indicator of the size or quality of the plan’s provider network. Furthermore, metal tiers can have plans of any provider network type. For example, there are gold HMO plans, as well as gold PPO plans.
Medical Coverage by Metal Tier
Generally speaking, higher metal tiers will cover a higher percentage of your medical costs. The covered percentages below show the approximate breakdown of costs for medical care, including whatever monthly and out-of-pocket costs you’re responsible for.
Please note: If you meet certain income requirements, you may qualify for Cost Sharing Subsidies that will further reduce medical costs associated with your silver plan.
Plan Costs by Metal Tier
As far as plan costs, plans in higher metal tiers come with higher monthly costs (premiums), but out-of pocket costs like deductibles, coinsurance and copays will be lower.
By Deductible Type: High-Deductible Plans
A high-deductible health plan (HDHP) is simply a plan that meets certain IRS requirements; most importantly, a minimum deductible. The IRS has a say because this type of plan can be combined with a Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) to help you pay medical costs on a pre-tax basis. Lower premiums are another important feature of a high-deductible health plan. However, while you’ll pay less on a monthly basis, you will be responsible for paying your healthcare costs up to a certain amount (deductible) before your insurance company begins paying its share.
Additional key points about High-Deductible Plans:
- Most plans do provide exceptions for preventive care expenses (check-ups, immunizations, certain screenings, etc.)
- You are not allowed to be covered by any other health plan
- Typically, copays for prescription drugs and office visits are offered after reaching the deductible
For videos and articles on HSAs and HDHPs, consult our HSA information page.