When you’re looking to choose a new insurance plan, it can be really stressful. Insurance is inherently confusing, and that only makes the plan-selecting process more dreadful. If you’re looking for a new plan, but don’t understand why there’s so many acronyms, we’re here for you. We’re breaking down each type of plan so you can make an informed decision when it comes time to sign a new insurance contract.
Keep in mind that not all plans are the same, even if they are the same plan type. For example, your HMO plan may have different guidelines than your friend’s HMO plan. The best way to fully understand your plan’s benefits is to contact your insurance company directly.
HMO: Health Maintenance Organization
- Normally you are required to have a primary care physician (PCP) who is considered a gatekeeper. If you are ever in need of specialty healthcare services, you will need to get a referral from your PCP.
- In most cases, your PCP will only refer you to specialists who are in-network.
- In general, you pay out-of-pocket for all bills from doctors who are out-of-network or seen without a referral. Your insurance plan will cover zero percent of the bill.
- If you have an HMO plan, your network of healthcare providers is usually local. This means you will not have access to providers who are out-of-state. This could be an issue if your family is not all in one state. (Example: If you have a child in college in Delaware, but the rest of your family resides in Pennsylvania, your child in Delaware will not be able to find in-network doctors under your HMO plan.)
In summary, an HMO will most likely require you to have a PCP and a referral every time you go to a specialist (except in the case of emergency). This means you might have to find a PCP you’re really fond of. Also, they won’t help you with the bill if you see an out-of-network provider. These restrictions are part of the reason why these plans normally have lower monthly premiums.
PPO: Preferred Provider Organization
- In most cases, you are not required to have a PCP or get referrals to see a specialist.
- You will likely have a “preferred” network of providers. This means if you see a “preferred” provider (an in-network provider), you will not have to cover as much of the bill as you would if you chose an out-of-network provider. If you choose an out-of-network provider, you generally do not have to foot the whole bill, and will still get some assistance (unlike with an HMO).
- Usually have higher monthly premiums.
Overall, PPO’s usually have providers that they’d prefer you use, but will still assist you if you need to see an out-of-network provider. You’ll also have a little more freedom over your health decisions, and won’t need to consult a PCP before going to a specialist. These are reasons why the monthly premiums tend to be higher.
EPO: Exclusive Provider Network
- You likely do not need a PCP or referrals to see a specialist.
- Similar to an HMO, you will probably be responsible for all bills if you see out-of-network providers.
In sum, EPO’s usually have providers they use exclusively. If you go to a provider that’s not on their list, they probably won’t help you with the bill. On the plus side, they most likely won’t make you get a referral or visit a PCP before visiting a specialist.
POS: Point of Service
- You are usually required to have a PCP and a referral to see a specialist.
- Similar to PPO, you’ll likely have more coverage if you choose a provider who is in-network.
In most cases, POS plans will require you to have a referral and a PCP, but may help you out if you see an out-of-network provider.
At the end of the day, the insurance plan you pick for yourself or your family may not be the plan your neighbors or coworkers pick, and that’s okay. When choosing a plan, it’s important to understand your circumstances and respond accordingly. As long as you’re making an educated decision, you’ll be on the right track.