Only four percent of Americans can name the four types of health insurance plans available to them. While this number is startlingly low, it’s also not surprising.
Health insurance involves a wide variety of terms, costs, and other details that are inherently difficult. If you’re learning about health insurance for the first time, it’s best to start with the basics.
The Four Types of Health Insurance Plans
The simplest way to ease into the complex world of health insurance is to understand the types of health insurance plans.
1. Health Maintenance Organization (HMO)
An HMO plan gives you access to a network of providers. You may choose any doctor within your given network. However, you may not choose an out-of-network doctor unless you’re willing to pay the penalties.
In addition, referrals require a visit with the doctor you choose from your HMO’s network. As long as you stay within these network parameters, your health insurance costs remain low.
2. Preferred Provider Organization (PPO)
The PPO plan is similar to the HMO, but provide larger networks with a wider variety of doctors and specialists to choose from. You also don’t need a referral from your primary care provider (PCP) to visit specialists.
PPOs also cover out-of-network provider visits but require you to pay more out-of-pocket. These perks come with a price—PPO plans are more expensive than HMO plans.
3. Exclusive Provider Organization (EPO)
The EPO plan is similar to the HMO plan but is more strict when it comes to out-of-network visits. Unless your visit is an emergency, EPO plans do not cover out-of-network visits whatsoever. That means you would have to pay for all costs associated with an out-of-network visit.
For most EPO plans, you don’t need a referral from your PCP to see a specialist. These plans also tend to be the cheapest of the four options.
4. Point of Service (POS)
POS plans provide a mix of HMO and PPO features. Like an HMO plan, POS plans require patients to choose a provider within its specific network. You pay much less if you stick to in-network providers.
These plans also require a referral to see specialists. However, if you need a specialist, you may choose an out-of-network provider at a higher cost.
Which Health Insurance Plan Is Right for You?
Choosing a health care plan depends on your health care needs and your budget. It’s essential to choose a plan you can afford, while also keeping your requirements in mind.
If you’re not in a position to choose permanent health insurance, or if you’re self-employed, consider temporary health insurance. This type of health plan is flexible and perfect for people who want a short-term plan because they’re between jobs or are on a very tight budget.
Plan Ahead for Your Health
With this guide, you’re part of the exclusive four percent of Americans who understand the four types of health insurance plans. If you’re still uneasy about health insurance’s complex details, don’t hesitate to fuel that curiosity by researching and reaching out to health care companies with questions and concerns.
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