Health insurance is a financial mechanism that helps us pay for medical services. If one is a US citizen, health insurance is mandatory. The law passed in the Affordable Care Act requires citizens to purchase this coverage individually or through their employers. Because of this, most of us will be buying health insurance. So, which type of plan is best? Here is a guide to the range of plans available.
Health Maintenance Organizations (HMOs)
Health maintenance organizations (HMOs) are a type of managed health care insurance plan that gives us access to a local network of participating doctors, hospitals, and other health care professionals and facilities. A primary care provider is the home base for medical care and will coordinate all follow-ups with specialists. The HMO is required to provide an individual with a list of providers within the network. In exchange, one must stay in-network to receive benefits such as co-pays and coinsurance.
Exclusive Provider Organizations (EPOs)
An EPO (Exclusive Provider Organization) is a different type of health insurance plan that allows people to choose in-network providers from a network of participating medical professionals. EPOs can be cheaper than PPOs (Preferred Provider Organizations) because insurers provide lower reimbursement rates to out-of-network providers, but they offer less flexibility.
HMOs typically require individuals to choose a primary care provider, while EPO plans do not.
Point of Service Plan (POS)
Point-of-service plans are a hybrid of health maintenance organization (HMO) and preferred provider organization (PPO) plans. The provider network is generally smaller, and the costs for in-network care—whether one visits a hospital or sees a specialist—are typically lower than they would be in an HMO. However, one must choose a primary care provider (PCP) from within the plan’s network of doctors and other primary care professionals. A PCP is one’s home base for advice about their overall health and coordinating care if they need to see specialists.
Preferred Provider Organizations (PPOs)
A PPO offers more flexibility to choose a primary care physician (PCP). PPOs typically provide coverage for a wide range of health care providers and facilities, and one can see doctors, specialists, and hospitals without a referral. However, one has to pay a higher co-pay if they see a doctor who is not part of the network or get covered services from another network provider.
