Types of Health Insurance Plans: Which One is Right for You?
Choosing the right health insurance plan can be confusing. Whether you’re just beginning a new job, are in an open enrollment period for the job you currently have, or merely researching what type of plan would be best for you, the health insurance marketplace offers several different options.
The differences between different types of health coverage can sometimes be difficult to figure out. Different plans have distinct benefits, and you want to make sure you’re getting access to physicians, specialists, emergency care, and prescription drugs in the most affordable way possible.
What can at first seem like a daunting task can be made simpler by understanding the differences between the types of health insurance plans that are available.
The following chart offers a simple breakdown of the three major types of health insurance plans:
| Plan type | EPO | HMO | PPO | POS |
|---|---|---|---|---|
| Services covered | In network only | In network only | In and out of network | In and out of network |
| PCP requirement | PCP not required | Must select PCP | PCP not required | PCP not required |
| Referral to see a specialist | Referral not necessary | Referral necessary | Referral not necessary | Referral necessary |
Read on to get a simple breakdown of the most common types of health insurance plans available so you can develop a better strategy when determining which one is right for you and your family.
What is a Primary Care Provider?
One major difference between the different types of health insurance plans is whether or not you are required to choose a primary care provider, or PCP. A PCP is also often referred to as a primary care physician.
When you have a PCP designated by a health insurance company, they are considered your first point of contact for all non-emergency health care services. Whether you have the flu, have injured a finger, or have a rash, your health care plan states that your PCP is your first stop for all your non-urgent health care needs.
Under plans where you are required to choose a PCP, you must see them first before seeking treatment from a specialist.
What Are the Different Types of Health Insurance Plans?
There are a variety of different types of plans to choose from in the health insurance marketplace. Each plan differs in terms of which doctors, hospitals, and pharmacies you can choose, in addition to how costs are split between you and your insurance provider. Here are the major types of health insurance plans offered in the United States.
Exclusive Provider Organization (EPO)
An EPO, or exclusive provider organization plan, is a managed care plan in which the subscriber is only covered when they utilize hospitals, doctors, and specialists within the plan’s network.
With an EPO plan, you will be responsible for the full cost of seeing doctors and specialists outside of the coverage network (with the exception of emergency care).
One benefit of choosing an EPO plan is that you do not need a referral to see a care specialist for health services. For example, if you have a problem with your foot, you do not need to see a primary care provider to be referred to a podiatrist. Another benefit of an EPO plan is that they can often be more affordable than other types of health insurance plans when you choose a doctor or specialist who is in the network.
Health Maintenance Organization (HMO)
A health maintenance organization plan, or HMO, restricts coverage of care to doctors who work exclusively for or under contract with a particular insurance company. As such, patients are restricted to seeking care from network providers.
HMO plans do not cover out-of-network care, except in the case of an emergency. Another potential drawback of an HMO is the fact that subscribers are often required to live or work in a particular service area to be deemed eligible for coverage.
One benefit from choosing an HMO is that their integrated care networks often provide a particular focus on preventive care and health benefit strategies such as diet, mental health, and exercise.
Preferred Provider Organization (PPO)
A PPO, or preferred provider organization plan, is a type of health insurance plan where subscribers pay less if they utilize doctors and health care providers within the plan’s network.
PPO plans do not require the selection of a primary care physician. A huge benefit of a PPO plan is that out-of-network doctors, hospitals, and service providers can be utilized without PCP referral.
Point of Service Plan (POS)
A point of service, or POS plan, is a type of health insurance plan where subscribers pay less when they utilize doctors, hospitals, and specialists that belong to the plan’s network.
Unlike EPO and PPO plans, POS plans require referral by a primary care provider in order to see a specialist.
The major benefit of a POS insurance plan is that members can visit doctors that are out of network. This allows them to see doctors and health care providers they are comfortable with while maintaining coverage for costs.
High Deductible Health Plan (HDHP)
A high deductible health plan, or HDHP, provides medical coverage for a lower monthly cost. That said, patients are often required to pay more health care costs on their own before the insurance company begins to contribute.
Health Insurance Metal Categories
Once you’ve chosen the type of health insurance plan that works best for you, you still need to choose which category of the plan you’d like to subscribe to. In the health care marketplace, how you and your plan split the cost of medical services is illustrated in “metal categories.” Unlike the Olympics, however, these metals are not related to the quality of medical care you receive.
The following chart breaks down each type of health insurance metal category and the cost differences between each:
| Insurance plan category | Portion of total cost paid by insurance company | Portion of total cost paid by patient (you) |
|---|---|---|
| Bronze | 60% | 40% |
| Silver | 70% | 30% |
| Gold | 80% | 20% |
| Platinum | 90% | 10% |
Source: healthcare.gov
No matter which type of health insurance plan you choose, you will have what’s called a “monthly premium.” A health insurance premium is a monthly fee you pay to an insurance company or health plan to provide health coverage. This monthly fee is separate from the cost of health care services.
When you choose a Bronze level plan, you will have the least expensive monthly premium. While the monthly premium for a Bronze plan is low, a drawback is that you’ll have to pay for most routine care out of pocket.
Silver plans offer moderately priced monthly premiums. Patients who qualify for cost-sharing reductions are required to pick a Silver plan to get the bonus savings. While the monthly premium for a Silver plan is higher than that of Bronze, you’ll still have most of your routine care covered.
A Gold plan is best suited to individuals who are willing to pay a lot each month in a higher premium, while having most of the cost of health services covered.
Similarly, Platinum plans require the highest monthly premium of all plans, but patients pay them knowing that nearly all their medical costs will be covered. Gold and Platinum plans are best for those who require a lot of medical care.
Choose an Insurance Plan With Confidence
When it comes time to choose a health insurance plan, make sure you have a full understanding of your plan options, what your plan covers, and read the summary of benefits given to you by your employer carefully.
If you are currently in need of an upcoming procedure or treatment course, but have concerns about whether or not you can afford it, the Compare.com medical procedure comparison tool can help.
The tool allows you to compare prices for a variety of common medical procedures in your local region, from MRIs to X-rays to bloodwork, surgeries, and more. It’s a terrific way to make sure you’re getting the care you need at a price you can afford.
Disclaimer: Compare.com does not offer medical advice and is in no way a substitute for any medical advice received from health professionals. Compare.com is unable to offer any advice on any medical procedure you may need.
