HMO: A budget-friendly plan
A Health Maintenance Organization (HMO) plan is one of the most affordable types of health insurance. It has low premiums and deductibles, and fixed copays for doctor visits.
HMOs require you to choose doctors within their network. When you sign up for an HMO, you’ll need to pick a primary care physician (PCP) for your regular checkups. Your PCP has to give you a referral before you can see a specialist, such as a local dermatologist or OB-GYN. Choosing a provider who is not in your HMO’s network, or visiting a specialist without a referral from your PCP is not likely to be covered by an HMO plan and may mean significant out of pocket costs.
POS: An affordable plan with out-of-network coverage
Just like an HMO, a Point of Service (POS) plan requires that you get a referral from your PCP before you can see a specialist. But with slightly higher premiums than an HMO, this type of plan covers out-of-network doctors. Costs are higher when you use services that are out of network. So keep in mind that, even though you’ll have the option to see a doctor who’s out of network, you’ll want to stay in-network whenever possible. If you want to have both in-network and out-of-network coverage, you may want to consider a POS plan.
PPO: The plan with the most flexibility
A Preferred Provider Organization (PPO) plan has higher premiums than an HMO or POS does. But this plan lets you see specialists and out-of-network doctors without needing a referral from a PCP. Copays and coinsurance for in-network doctors are low. If you know you’ll need more specialized healthcare in the coming year and you can afford higher premiums, you may want to consider a PPO plan.
HDHP: The plan with lower monthly fees and a higher deductible
A High-Deductible Health Plan (HDHP) has a higher deductible than that of a traditional insurance plan. The monthly premium is usually lower, but you pay more healthcare costs yourself. This is because all services are out-of-pocket expenses that go towards paying off your deductible. Once that’s been paid off, your insurance company will start paying for your health expenses. Designed for people with few medical expenses, an HDHP can be combined with a health savings account (HSA), which lets you set aside tax-free money to pay for certain medical expenses.