4 Types of Health Insurance Plans

 

4 Types of Health Insurance Plans

Types of Health Insurance Plans

 

Healthcare coverage reduces out-of-pocket costs when you need medical treatment. However, health insurance is never one-size-fits-all. The main types of health insurance plans are:

• Health maintenance organization (HMO)
• Preferred provider organization (PPO) 
• Point-of-service (POS)
• Exclusive provider organization (EPO)

Types of Health Insurance Plans

Distinguishing between the different health insurance plans means understanding how they work and what they’ll cost. It’s also helpful to know the pros and cons of each health insurance option. 

 

Health Maintenance Organization (HMO)

An HMO allows you to get healthcare services from an approved network of providers. Out-of-network care typically isn’t covered unless it’s an emergency. 

You may be required to live or work in the HMO’s service area to get covered. You’ll typically need to choose a primary care provider (PCP), and referrals may be necessary to see a specialist.

Preferred Provider Organization (PPO)

PPO plans allow you to visit out-of-network providers, but you save the most when staying in network. You don’t have to choose a primary care provider and may not need a referral to see a specialist if you’re going out of network.

 

A PPO can be more expensive than other plans in terms of premiums, co-pays, co-insurance, and deductibles.45 However, you might consider that a tradeoff worth making if you would like more flexibility in choosing your care provider. 

 

Point-of-Service (POS)

A POS plan shares some features of an HMO and a PPO. You can choose a primary care provider from the plan’s network. But you can also go out of network to seek care, either by choice or out of necessity. You may also need to choose a primary care provider and get referrals for care.

You’ll generally pay most out-of-network costs unless your primary care provider refers you to another doctor. Referrals are required to see a specialist.

 

Exclusive Provider Organization (EPO)

An EPO is a type of managed care plan similar to HMO and PPO plans in certain regards. You’re only covered when you see in-network providers. However, you don’t have to choose a primary care provider, and you don’t need a referral to see a specialist.

 

There is one exception to the in-network rule: Emergency services are always covered, whether you see a provider in or out of networ.

 

 

Plan	How It Works	What You Pay	Pros	Cons
Health Maintenance Organization (HMO)	Provides care through a network of approved providers.  Referrals required to see a specialist.	Co-pays for primary and specialist care, usually. There may be no deductible or co-insurance for in-hospital care.	Coverage may be cheaper than other options.	You may bear the full cost of out-of-network care unless it’s an emergency. Limited freedom to choose providers.
Preferred Provider Organization (PPO)	Lets you visit in-network or out-of-network providers and choose a primary care provider.	Co-pays, co-insurance, and deductibles. In-network care is usually cheaper.	Greater freedom of choice than HMOs allow. You may not need a referral to see a specialist.	Coverage may be more expensive than an HMO plan.
Point-of-Service (POS)	You get to choose a primary care provider, and can go out of network for care if needed.	Co-pays, co-insurance, and deductibles. In-network care is typically cheaper.	You don’t have to stay in network if you’d prefer to see another provider.	Referrals are required to see a specialist.
Exclusive Provider Organization (EPO)	Limits coverage to in-network providers, except in emergencies.	Co-pays, co-insurance, and deductibles. You pay out-of-network costs in full unless it’s an emergency.	No need to choose a primary care provider. Referrals not required for specialists.	Less common than other types of health insurance