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Insurance > Understanding Health Insurance

Health Insurance Plan Types

Private insurers and employer-sponsored insurance often have similar types of plans to choose from. While plan names may be different, these are the most common types of health insurance plans offered.

Plan Types

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Health Maintenance Organization (HMO)

What is an HMO?

  • You will usually be required to see doctors in the plan’s network
  • Plan will not cover doctors and services that are not part of its network. You will need to pay OOP
  • You will require a referral from your primary care physician to see a specialist
Exclusive Provider Organization (EPO)

What is an EPO?

  • You will usually be required to see doctors in the plan’s network, except in an emergency
  • Plan will not cover doctors and services that are not part of its network. You will need to pay OOP
Preferred Provider Organization (PPO)

What is a PPO?

  • You can choose doctors and services inside or outside the plan’s network
  • Plan will cover some of the cost if you decide to go out of network. The plan will cover more if you stay in network
  • You will usually not need a referral to see a specialist
Point of Service (POS)

What is POS?

  • You can choose to get care from doctors and services inside or outside the plan’s network 
  • Plan will cover some of the cost if you decide to go out of network. The plan will cover more if you stay in network
  • You may require a referral to see a specialist
High-Deductible Health Plan (HDHP)

What is an HDHP?

  • This type of plan can be a PPO, POS, or HMO with a lower monthly cost, but you must spend a higher deductible before insurance will start to cover costs
  • Plan may include options for a Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA). HRAs are benefit plans from your employer that reimburse you for OOP expenses. HSAs allow you to save money for medical OOP expenses.
  • The plan might only count in-network services when trying to reach the deductible
  • The plan might have differences in what is covered once you have reached the deductible, so be sure to check the plan details when choosing an HDHP
  • Your access to specialists may depend on what type of HDHP you have
Catastrophic Health Insurance Plan

What is a catastrophic health insurance plan?

  • This type of plan has a lower monthly cost, but you must meet a high deductible before insurance will start to cover costs
  • You are eligible if you are under 30 or you qualify due to financial hardship
  • Covers 3 primary care physician visits per year and many preventive services

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What are Health Insurance Marketplace Plans?

The federal government operates the Marketplace, available at HealthCare.gov, for most states. The Marketplace helps people find affordable health insurance. Some states run their own Marketplaces.

What to consider when choosing a health insurance plan

Two important factors to consider with health insurance are cost and coverage.

Before enrolling in an insurance plan, consider the following questions:

  • Do you or your family go to the doctor often?
  • How many prescription medicines are you taking?

The answers may help you figure out how much coverage you or your family might need and how much it might cost.

If you’re generally healthy, you may want to consider a less expensive plan, understanding the risk that any unplanned health care needs will result in higher out-of-pocket (OOP) costs.

If you need a lot of care, you may want to consider a plan that has a lower OOP cost for each service you require.

Health Insurance Plan Types With Lower Premiums Equal Higher Deductibles/OOP Costs While Plans With Higher Premiums Equal Lower Deductibles/OOP Costs
Health Insurance Plan Types With Lower Premiums Equal Higher Deductibles/OOP Costs While Plans With Higher Premiums Equal Lower Deductibles/OOP Costs

For additional considerations, including information on ratings for different insurance plans, go to HealthCare.gov.