What Type of Plan Works Best For Me?
HMO, PPO, EPO, POS, CDHP. Although this sounds like alphabet soup, these are actually all health plans designed with different needs in mind.
Health Maintenance Organization (HMO)
With an HMO, you choose a primary care physician (PCP) who coordinates your care through in-network doctors and hospitals. When visiting a specialist or receiving care, a referral from your PCP is often required for the services to be covered. You do not have the option to see out-of-network providers when you have an HMO.
Preferred Provider Organization (PPO)
If you want the option to manage your own care without referrals, then a PPO may be right for you. With a PPO, members can receive care from any provider, either in- or out-of-network, without a referral.
Exclusive Provider Organization (EPO)
An EPO combines flexibility and cost-savings: You won't need referrals for specialty care, but you must choose in-network providers.
A POS plan combines elements of an HMO and a PPO. Like an HMO, you need to select a primary care physician. But like a PPO, you can receive medical care from both in- and out-of-network providers. You’ll pay less when you get a referral to a doctor or hospital in network, and more if you choose a doctor or hospital out of network.
In a tiered network plan, the network of doctors and hospitals is divided into groups called “tiers” based on cost and quality measures. You can save on your out-of-pocket costs by choosing the lowest-cost tier, but you always have the option to choose providers in the other tiers (you’ll just pay more). For example, you may pay only a $15 copay to see a doctor in Tier 1, $30 for a doctor in Tier 2, or $50 for a doctor in Tier 3. This type of plan may be a good option if your doctors and hospitals are already in the lowest-cost tier, or if you don’t mind switching providers to save money.
Consumer-Driven Health Plans (CDHP)
CDHPs are becoming more popular because they give people control over how their health care dollars are spent. A CDHP generally pairs high deductibles with low premiums and a spending account to help you set aside money for health expenses. There are several different types of spending accounts available, such as health savings accounts (HSAs), health reimbursement accounts (HRAs), and flexible spending accounts (FSAs).
Learn more about health spending accounts.