Choosing the right insurance to protect you and your family is difficult. However, a lot of times, you may not have much of a choice!
From the cost perspective, it is usually best to stick to an employer-based plan since you are paying pre-tax dollars and employers subsidize your monthly premiums. Your choice is often limited to the type of insurance plan under a major insurance company. But what are your choices?
There are four types of insurance plans:
- Health Maintenance Organization (HMO)
- Exclusive Provider Organization (EPO)
- Point of Service (POS)
- Preferred Provider Organization (PPO)
These plans vary based on several factors:
Network restrictions: Both HMO and EPO limit you to seeing a select group of providers contracted in the network. Both POS and PPO plans allow you to see providers outside of the network. Usually, PPO plans have a broader network of providers given higher reimbursements given to providers’ offices for services.
Referral requirement: Both HMO and POS require specialist referrals to be made from your primary care provider (PCP). EPO does not require referrals from PCPs as long as the specialists are in the network. PPO does not require any referrals except for seeing physical therapy, occupational therapy, and speech therapy.
Co-payments: Usually, HMO and EPO plans have lower co-payments for clinic visits, imaging tests, and procedures compared to POS and PPO plans. The additional flexibility with seeing providers out-of-network comes at a higher cost to you and a higher pay to the providers’ offices. Some plans may not have higher co-payments but have higher monthly premiums.
Emergency care / hospital care: Due to the Emergency Medical Treatment and Labor (EMTALA) law, there are no restrictions in emergency care, but you may be transferred to an in-network hospital should you need to be hospitalized for a medical condition. This is particularly true to HMO, EPO, and POS plans.
These different insurance plans can certainly be confusing. In general, I would recommend you choose a PPO plan in these situations:
- You are new to the city and/or state. A PPO plan can help you familiarize with the providers in the area.
- You have a medical condition that requires care from various specialists and infusion or injectable medications. Usually PPO plans do allow you to see the specialists and obtain these medications with less hassle.
- You do not want to have too much hassle with having a PCP make referrals each time you want to see a specialist.
Otherwise, once you understand the in-network providers and the covered medical benefits, enrolling in a HMO likely can save you a lot of money.
*Please note that information is simplified to allow better understanding of general concepts. Please consult further details about your insurance plan with the appropriate member services department.