In today’s society, health insurance represents a controversial subject, and from HMOs and PPOs to HDHPs and EPOs, the many different coverage options can be difficult to understand. Nevertheless, it’s crucial to protect yourself, your loved ones, and/or your valued employees with this type of coverage, especially considering the costly nature of health care. Whether you’re looking for individual or group health insurance, the highlights of each plan listed below will help you better understand the options available to you, allowing you to find the best health insurance coverage for your specific needs.
HMO – Health Maintenance Organization
A coverage option for both individuals and groups, the type of health insurance plan known as a Health Maintenance Organization (HMO) uses a Primary Care Physician (PCP) to direct all health care. Under this type of plan, services are provided by physicians and allied health care personnel who are employed by or under contract with the HMO. If you select this type of prepaid, or capitated health insurance plan, individuals will pay a small monthly fee to be a member of the HMO, as well as small fees or copayments for specified health care services. Except in the event of an emergency, no benefits are available outside of the provider network.
PPO – Preferred Provider Organization
Another plan option when looking for health insurance, the Preferred Provider Organization allows you to self-refer to any provider in the network. Under a PPO, hospitals and physicians provide discounted rates to plan members, so when receiving services from in-network providers, you will enjoy a greater benefit, which may be as high as 90 to 100 percent after the deductible. In regard to treatment received outside of the network, you will typically be reimbursed 60 to 80 percent, and these services typically have a lifetime maximum benefit per member (ie: $1,000,000). With this type of health insurance plan, all in-network office visits, the ER and prescription drugs are covered for just a co-pay, but pre-authorization requirements must be met, regardless of whether the provider is in- or out-of-network.
POS – Point of Service
Similar to an HMO in-network plan, the Point of Service (POS) health plan uses a PCP as a “gatekeeper” to refer cases to other in-network providers. Although you will pay more out of pocket if you opt to receive treatment from an out-of-network provider, as an insured individual under a POS plan, you are allowed to see either in-network or out-of-network providers.
EPO – Exclusive Provider Organization
Similar to the PPO health insurance plan, the Exclusive Provider Organization or EPO allows you to self-refer to any provider in the network. However, unlike the PPO, there is no out of network coverage under an EPO health insurance plan, except in the event of an emergency. If you choose this type of plan, you will have coverage for office visits, the ER, and prescription drugs for just a co-pay. Like the PPO, pre-authorization requirements must be met under the EPO as well.
Indemnity health plans, also known as “fee-for-service” plans, existed primarily before the rise of PPOs and HMOs, and provide traditional coverage. As an insured individual under an indemnity plan, you are allowed to receive services from the doctor, clinic, or hospital of your choice, but will pay a predetermined percentage of the cost of health care services, while your insurance company (or self-insured employer) will finance the remaining costs. Individual providers determine the fees for these services, causing them to vary from one physician to another. Under these types of plans, there are normally no co-pays for visits to your doctor’s office and a deductible generally applies.
High Deductible Health Plans (HDHP)
Under a High Deductible Health Plan (HDHP), all covered services are subject to your deductible, with the exception of routine preventive care, which is fully covered. If you opt for this plan, you typically will not be charged co-pays for prescription drugs or visits to your doctor’s office. HDHPs can be either EPO or PPO plans and may be paired with an H.S.A. (Health Savings Account). Both the annual contribution levels for the H.S.A., and the deductible and out of pocket maximums under the HDHP are determined by the IRS.