Whether you're uninsured or shopping for a new health insurance policy, understanding the different types of health insurance plans can help you become a well-informed healthcare consumer. Although policy details and premiums vary widely, knowing the difference between the most common health insurance categories goes a long way towards helping you select the right plan for your needs.
Health Maintenance Organization (HMO)
HMOs require the least money upfront from the patient of any of these types of health insurance programs. Premiums, deductibles and co-pays are less expensive than with some types of insurance, provided you use healthcare providers within the plan's network. When you choose an HMO, you'll also need to select a Primary Care Physician (PCP). Women may choose a primary OB/GYN with some plans. In addition to general healthcare services, the PCP refers patients to specialists when additional testing and/or procedures are in order. HMOs offer more coverage than many other plans.
Participating Provider Option (PPO)
Like HMOs, PPOs use health insurance provider networks. Although most PPOs require a deductible and are usually more costly than HMOs, this type of health insurance program allows greater freedom when it comes to choice of doctors. Referrals from a primary care physician are not required in order to see a specialist. You may pay more for using an out-of-network doctor or hospital, and occasionally may find that such a visit is not covered by your plan. Fortunately, deductibles frequently do not apply to preventive health care visits under a PPO plan.
Consumer Directed Health Plans (CDHPs) and Health Savings Accounts (HSAs)
A consumer directed health plan allows the participant to choose health care providers in or out of network, and a referral by a PCP is not always required in order to see a specialist. CDHPs usually carry high deductibles with corresponding low premiums. Eligible consumers who choose CDHPs also often choose to enroll in HSAs. In addition to the relatively low cost of a CDHP, those who qualify for HSAs can experience substantial tax benefits while saving money towards health care costs that may or may not be covered by the CDHP.
A consumer directed health plan allows the participant to choose health care providers in or out of network, and a referral by a PCP is not always required in order to see a specialist. CDHPs usually carry high deductibles with corresponding low premiums. Eligible consumers who choose CDHPs also often choose to enroll in HSAs. In addition to the relatively low cost of a CDHP, those who qualify for HSAs can experience substantial tax benefits while saving money towards health care costs that may or may not be covered by the CDHP. Low cost insurance medical benefits plan for you and your family.
