What are the Differences between Health Insurance Plans?

An HMO (or “health maintenance organization”) requires you to select a primary care physician (PCP) who acts as "gatekeeper." Think of your PCP as your personal health-quarterback, strategically coordinating all of your care and providing for your basic healthcare needs. If you ever need to see a specialist or require a diagnostic service (such as a blood test), you will need a referral from your PCP. Your referral will always be to a provider within your HMO network. If you choose to see a doctor outside of the network or without a referral, you will generally have to pay all costs out-of-pocket unless it is a true medical emergency or you have no other options. With an HMO, your physician network is local.

A PPO (or “preferred provider organization”) is a health plan with a “preferred” network of providers in your area. You do not need to select a primary care physician and you do not need referrals to see a specialist. If you see a “preferred” (or “in-network”) provider, you will only be responsible for paying a portion of the bill (according to your plan's coverage structure). If you choose to see a doctor who is outside the preferred network, you will generally have to pay a larger portion of the bill than you would for an “in-network” provider, but most plans will still cover a portion of the bill. With a PPO, you will have access to out-of-state providers that are considered in-network.

An EPO (or “exclusive provider network”) is a bit like a hybrid of an HMO and a PPO. EPOs generally offer a little more flexibility than an HMO and are generally a bit less pricey than a PPO. Like a PPO, you do not need a referral to get care from a specialist. But like an HMO, you are responsible for paying out-of-pocket if you seek care from a doctor outside your plan's network. An EPO is a good option if you want to see specialists without a PCP referral within your network.

A POS (or "point of service”) plan is also a hybrid of an HMO and PPO plan. Like an HMO, you will need a referral from your PCP in order to see a specialist. But, like a PPO plan, you will pay less if you use doctors, hospitals, and other healthcare providers in the plan’s network, and you will have access to out-of-network providers at an increased cost.

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