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Comparing Health Insurance Plan Types

Health Plan Type Comparisons
It doesn’t matter how you obtain your health insurance. Whether it’s through your employer or the federal marketplace or some other avenue, comparing health insurance plan types can be tricky, and even just down right confusing. The acronyms alone are enough to make you crazy. The four most common types are HMOs, PPOs, EPOs, and POS plans. Which one you select is important too, because it will determine your out-of-pocket costs and which doctors you can and cannot see.

Before explaining what each acronym means and the basis of how they work, there are a few terms you need to be aware of while comparing health insurance plan types.

Provider

A provider is simply someone who provides health care services. A provider refers to physicians, hospitals, clinics, chiropractors, physical therapists, and others offering health care services.

In-Network

In-network refers to providers or health care facilities that are part of a health plan’s network with which it has negotiated a discount. These networks provide services at lower cost to the insurance companies with which they have contracts, and as a result, insured members usually pay less when using an in-network provider.

Out-of-Network

“Out-of-Network” refers to physicians, hospitals or other providers who are not contracted with an insurance plan. Services received from out-of-network providers may not be covered, or covered only in part by an individual’s insurance company.

Out-of-Pocket Costs

Out-of-pocket costs refer to the portion of your covered medical expenses that you can expect to pay during the course of a plan year. Your out-of-pocket costs can include a combination of your health plan’s deductible, copays, and coinsurance.

HMO vs. PPO vs. EPO vs. POS

Being familiar with these acronyms and knowing what each entails in terms of your financial responsibility is crucial when comparing health insurance plan types for you or your family. Depending on which plan you select will determine your out-of-pocket expenses and which providers you will have access to.

Comparing Health Insurance Plan Types

Plan TypeOut-of-Network Coverage?Referral Required?Best Suited For:
HMO: Health Maintenance OrganizationNo. Except for emergencies.Yes.People that want lower out-of-pocket costs and a primary doctor that coordinates your care for you, including ordering tests and working with your specialists.
PPO: Preferred Provider OrganizationYes, however, care received out-of-network will be more expensive than in-network care.No.People that want broader access to providers and don’t want to be required to get referrals to see specialists.
EPO: Exclusive Provider OrganizationNo. Except for emergencies.No.People that want lower out-of-pocket costs, but don’t want the referral requirement.
POS: Point of Service PlanYes, however, care received out-of-network will be more expensive than in-network care. In addition, a referral is needed to receive care out-of-network. Yes.People that want more provider options and a primary doctor that coordinates your care for you, including ordering tests and working with your specialists.

Know The Trend

For stock brokers, trend analysis refers to the study of past stock prices to predict future movements. Applying this concept when comparing health insurance plan types can help you select the right one. Look at your family’s medical needs and history. Look at the frequency and type of treatment you’ve received in the past. Although it’s impossible to predict future medical expenses, knowing your medical needs trends can help you make an informed decision.

Must Haves

In the long run, while comparing plans, there are two documents which must be reviewed thoroughly before making a decision. The first one is called the Summary of Benefits (SOB). The insurance carrier usually has a link to the Summary of Benefits on their website. The SOB provides a snapshot of the plan’s benefits. It will list deductibles, copay and coinsurance amounts, as well as specific health care services and whether or not they covered,and at what level. The Summary of Benefits will also show prescription drug coverage details.

The second document you need is the plan’s Provider Directory. This document lists the doctors and hospitals that participate in the plan’s network. If you want to see a specific doctor, this directory will confirm whether or not they will be in-network or out-of-network.

HMO / POS Advantages

  • Coordinated Care: Your primary care physician (PCP) chooses specialists for you. In addition, your doctor’s staff will coordinate visits and handle your medical records.

PPO / EPO Advantages

  • Freedom to choose your doctors. HMO and POS plans require having a referral before seeing a specialist. Many people don’t like this requirement and opt for a PPO or EPO plan.

For more information, or to get a quote, you can browse and compare health insurance plans, here.