Understanding Your Health Insurance Options: Different Plan Types

| Posted On Oct 27, 2015 | By:

health insuranceAs we highlighted in last week’s blog post about insurance terms and definitions, there’s a lot to consider when choosing a health insurance plan that will work best for you and your family. Knowing the meaning of the various cost components is important, but it’s also important to understand how different plans work so you know what costs you may incur when you seek care. For example, some plans require that you choose a primary care provider to coordinate your care in order to get the full cost coverage the plan allows, while others give you more flexibility to choose who you see but may have different cost tiers for different providers.

This week, therefore, we explain how different insurance plan types work – hopefully making sense of the alphabet soup of PPO, POS, EPO, HMO, and so on.

Below is a brief overview and explanation of these different types of insurance plans.

Health Maintenance Organization (HMO): This type of health insurance plan emphasizes preventive care and coordination of care by a primary care physician (PCP). HMO patients choose a PCP within the insurance plan’s network who refers patients to specialists and services as necessary. Except for a few services for which a referral is not required (e.g., seeing an OB/GYN, having a routine eye visit, etc.) there is no coverage for unauthorized care, and you, the patient, may be responsible for the full cost of the specialty office visit or procedure. It’s therefore important that you receive a referral from your PCP and check with your insurance plan to make sure the specialist is part of your insurer’s network.

Preferred Provider Organization (PPO): A PPO plan allows you to visit any physician or healthcare provider you wish without first requiring a referral from a PCP – in fact, without requiring you select a PCP with your plan at all. With a PPO plan, you need to be aware of whether a clinician is in or out of your health insurance plan’s network. Even for in-network care, you will have to pay a copay or coinsurance depending on your plan design, but if you choose to see an out-of-network clinician, you will incur higher out-of-pocket costs which usually include a deductible and coinsurance. Again, although you’re not required to designate a PCP with a PPO plan, it can be a good idea to choose one as he or she can assist you in determining the care you need and then coordinating that care effectively.

Point of Service (POS): A point-of-service plan is a cross between an HMO and a PPO plan. Like an HMO, you choose a PCP and can choose to have that PCP manage your care through use of referrals to see specialists. But, like a PPO, you may see a specialist of your own choosing instead and not obtain a referral from your PCP. If you do this, you will incur additional costs (copayment, deductible and/or coinsurance), even though the clinician seen may be in your insurer’s network.

Exclusive Provider Organization (EPO): Usually this is a PPO that has no out-of-network benefits – you need to choose to see specialty providers who are in the insurance plan’s network or you will not receive any cost coverage or benefit from your insurance plan. Further, some insurers do require you to choose a PCP and obtain referrals for specialist visits.

Massachusetts Health Connector: The state’s health insurance exchange set up under the Affordable Care Act, where individuals and families can compare plans and purchase health insurance if none is available to them by an employer or government program (e.g., Medicare). You can also apply for MassHealth (the state’s Medicaid program) or subsidies through the Health Connector, and if you qualify, you can sign up for one of these plans through MassHealth or the Health Connector.

So what plan type should you choose? The answer is a very personal choice based on your anticipated healthcare needs, your preference to see specific doctors and specialists, the costs of each plan to achieve that, and what might be available to you through your employer or the Health Connector. Generally speaking, HMO plans are less expensive than other plan types, but you may be giving up flexibility to see certain specialists. PPO plans are usually the most expensive but also give you the most flexibility. Therefore, you need to consider what’s most important to you when doing a cost/benefit analysis and deciding which insurance plan best suits your circumstances. If you have questions about your options, you should contact your employer or the insurer for clarification.

Harvard Vanguard accepts most health insurance plans. For a detailed listing, click here.


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