What are the types of health insurance plans?

What are the five types of health insurance plans?

The five common types of health insurance plans are PPO, HMO, EPO, POS, and HDHP. PPO, HMO, EPO, and POS plans differ mainly in provider networks, referral requirements, and out-of-network coverage. An HDHP is defined by its deductible and out-of-pocket cost limits and can use different network structures.

Preferred Provider Organization (PPO)

A preferred provider organization (PPO) offers flexibility to see in-network and out-of-network healthcare providers without a referral from a primary care physician.

Here are a few highlights:

A primary care physician is not required.
You don't need referrals to see a specialist.
Provider networks are usually larger, so you have more doctors to choose from.
PPOs allow you to receive both in-network and out-of-network care, so you can see any doctor you want.

A few things to know about PPOs:

Premiums are higher than those of other plans, sometimes more than double the cost of a health maintenance organization (HMO) or a high-deductible health plan (HDHP).
Out-of-network care has higher deductibles and copays.

PPOs are a popular choice with employer-sponsored plans where the employer covers a portion of the premium.

Health Maintenance Organization (HMO)

A health maintenance organization (HMO) limits coverage to doctors, hospitals, and other providers in its network, and requires a referral for specialist care.

Here are a few of the highlights:

Care is provided only by the health plan’s network of doctors and hospitals.
You will have a primary care physician (PCP) who is in charge of coordinating your care.
Premiums are lower thanks to the more controlled nature of the network and access to care.

A few important things to know about HMOs:

Out-of-network care is not covered except for an emergency.
Referrals are needed from your PCP to see a specialist.
In-network care is often limited to a specific geographical area.

HMOs keep costs lower by limiting the network and requiring referrals for specialists. You can expect both lower premiums and often lower coinsurance amounts.

Exclusive Provider Organization (EPO)

An EPO is similar to an HMO in that it has a limited network, but it has a few key differences, including access to specialists without a referral in some cases.

Here are some key highlights:

Care is provided by a local (sometimes national, depending on the plan) network.
You generally don't need a PCP, and you typically don't need a referral to see an in-network specialist.
Premiums are lower than with a PPO.

Here are a few things to be aware of:

Out-of-network care is not covered unless it’s an emergency.
Deductibles may be higher with this type of plan.
EPOs tend to be a little more costly than HMOs.

Point of Service (POS)

A point of service (POS) plan combines features of HMOs and PPOs. You choose a primary care physician and need a referral to see a specialist, but you can see out-of-network providers on a reimbursement basis.

Here are the key points:

A PCP manages your healthcare and provides referrals to specialists.
You can see an out-of-network specialist, and the plan will cover more of the cost if your PCP refers you.
In-network care typically has lower deductibles and copays than out-of-network care, though deductibles may still apply depending on the plan.

There are a few more things you need to know about a POS plan:

If you see an out-of-network doctor, you must file the claim paperwork yourself.
You’ll pay more if you don’t have a PCP referral to an out-of-network doctor.
Premiums are higher than with an HMO but still lower than a PPO plan.

High-Deductible Health Plan (HDHP)

An HDHP, as the name implies, has a higher deductible than other health plans. These plans are designed for people who don’t anticipate many medical needs and want the most affordable healthcare plan. Here are a few important things to know:

Premiums are among the lowest of any plan type, often comparable to or lower than HMO premiums.
It can be either an HMO or a PPO plan, so networks vary.
You can save money pre-tax in a health savings account (HSA) to pay healthcare costs.
Your employer may provide an HSA contribution as a benefit to you.

Here are some other things you need to consider before choosing an HDHP:

Deductibles are much higher than average.
Only preventive care is exempt from the deductible; you’ll pay for all other care until you meet the deductible.
After the deductible is met, you will still have to pay a coinsurance amount.

How to pick the right health insurance plan

The right health insurance plan balances your monthly premium, expected medical expenses, and access to healthcare providers. Review the care you and your family used in previous years, then consider upcoming appointments, prescription drugs, and ongoing treatment. Compare the total costs of each plan, not just the monthly premium, before making a decision.

Here are a few questions to ask yourself:

Would I rather pay high premiums or potentially higher out-of-pocket costs?
Can I afford a high deductible?
Would I rather have a limited network of providers or be able to get my healthcare from more physicians?
Are my current healthcare providers part of the plan's provider network?
Do I mind getting a referral to see a specialist?

Once you answer those questions, you will know what type of health insurance plan is best for you. Make sure you compare health insurance plans to make the right choice.

What coverage do all health insurance plans include?

Marketplace health insurance plans cover 10 categories of essential health benefits under the Affordable Care Act (ACA), including hospital care, prescription drugs, mental health services, preventive care, and pediatric dental and vision care. Adult dental and vision care are not included in these essential benefits.

These covered benefits include:

Outpatient care
Emergency care
Hospitalization
Pregnancy and newborn care
Mental health and substance abuse services
Prescription drugs
Rehabilitation services
Lab tests
Preventive and wellness services
Dental and vision care for children

Essential health benefits provide a coverage baseline for all plans. However, there are still many variations of health insurance plans depending on plan type, deductibles, copays, out-of-pocket costs, and provider networks.

You can find out the specifics about each plan offered by reviewing the Summary of Benefits and Coverage on each plan's website. Your employer or the ACA marketplace should also provide side-by-side comparisons of available plans.

FAQ: Health insurance plans

How do I know what type of health insurance I have?

Check your insurance card and plan documents for the plan type, such as PPO, HMO, EPO, or POS. If the type is not listed, contact your insurer or check your online member account. If your employer provides your insurance, your HR or benefits team can also help identify the plan and explain its network and referral rules.

What's the cheapest type of health plan?

The cheapest health plan, in terms of monthly premiums, is usually either an HMO or an HDHP. Which is cheapest for you depends on the plans available to you and their deductibles and coinsurance options.