Finding the right health insurance plan can feel complicated, and understanding the differences between plan types can help you make a more informed choice.
There are several factors to consider when deciding which insurance plan may work best for your household’s medical needs. Common considerations include how often you typically need care, your age, and whether you want access to specific doctors or hospitals.
With that in mind, it can be helpful to understand the main types of health insurance plans and how they generally work before choosing one.
Main Types of Health Insurance
The most common types of plans include HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), EPO (Exclusive Provider Organization), and POS (Point of Service). These plans differ in areas such as referral requirements, provider networks, monthly premiums, and out-of-pocket costs. Employers and online marketplaces typically provide details on what each plan includes.
Health Maintenance Organization (HMO)
HMO plans usually provide access to a defined network of doctors and hospitals. A network is a group of providers that agree to certain rates and standards set by the plan.
A key feature of an HMO is the requirement to choose a primary care physician (PCP). Your PCP generally coordinates your care and provides referrals to specialists when needed. Without a referral, specialist visits or procedures may not be covered, except in emergencies.
These plans often have lower monthly premiums and may have lower deductibles. However, coverage is typically limited to in-network care, aside from emergency situations.
Preferred Provider Organization (PPO)
PPO plans generally offer more flexibility in choosing doctors and hospitals. While they have a preferred network, you may still receive coverage for out-of-network care, often at a higher cost.
Referrals from a primary care physician are usually not required to see a specialist. PPO plans tend to have higher monthly premiums and commonly include deductibles, which can result in higher out-of-pocket costs.
Exclusive Provider Organization (EPO)
EPO plans usually limit coverage to a specific network of providers, which can help keep premiums lower than some PPO plans. They may offer slightly more flexibility than HMOs while still requiring you to stay in-network for coverage.
Referrals are typically not required to see specialists. These plans may appeal to individuals looking for lower monthly premiums who are comfortable with higher deductibles and staying within a defined network.
Point of Service (POS)
POS plans combine features of HMOs and PPOs. Care is generally more affordable when you stay within the network, but you may be able to see out-of-network providers if you’re willing to pay more and submit claims for reimbursement.
These plans usually require referrals from a primary care physician for specialist care. Premiums may be lower than PPO plans, but costs can increase when you go outside the network.
High Deductible Health Plan (HDHP)
High Deductible Health Plans are often offered alongside lower monthly premiums but require you to pay more out of pocket before coverage begins. An HDHP can be paired with several plan types, such as HMO or PPO.
These plans are commonly associated with a Health Savings Account (HSA), which allows you to set aside pre-tax money for qualified medical expenses. Employers may also contribute to an HSA. If you choose this type of plan, it’s generally important to plan for covering the deductible if medical care is needed.
| Health Insurance Plans | Overview | PCP Referrals | Stay in Network |
|---|---|---|---|
| HMO: Health Maintenance Organization | Typically lower premiums with low or no deductibles | Yes | Yes |
| PPO: Preferred Provider Organization | Higher premiums and often includes a deductible | No | No, but in-network care may cost less |
| EPO: Exclusive Provider Organization | Lower premiums with higher deductibles | No | Yes |
| POS: Point of Service | Lower premiums with higher deductibles | Yes | No, but in-network care may cost less |
How to Enroll
Many people enroll in health insurance through their employer. If that option isn’t available or you want to compare plans, there are other ways to shop for coverage.
You can explore plans through HealthCare.gov by starting with your state’s marketplace. If your state does not operate its own marketplace, you may be redirected to the federal exchange.
It’s also possible to purchase health insurance through private exchanges or directly from insurance companies.
Choosing the Best Plan for You
Selecting a health insurance plan involves weighing several factors. If you have preferred doctors or specialists, check whether they are included in the plan’s network. If not, you may want to look for plans with broader provider options.
Monthly premiums, deductibles, and out-of-pocket limits are also important to review. Lower premiums often come with higher deductibles, so it’s helpful to consider how much you might need to pay upfront if care is required.
Finally, think about how often you typically use healthcare services. Someone who visits the doctor infrequently may prefer lower premiums with higher out-of-pocket costs, while someone who needs regular care may benefit from higher premiums with lower overall costs.