A mysterious acronym indicates the type of features your health insurance plan will offer. These features pretty much apply across the board (with slight variations):
- Health Maintenance Organization (HMO) Your healthcare is managed through a Primary Care Physician (PCP), who refers you to specialists when needed. Generally, you pay a copay (a set flat fee) for medical services included in your plan’s benefits. All medical care must be received in-network, or you’ll get stuck with the full bill.
- Preferred Provider Organization (PPO) You can choose from in-network and out-of-network healthcare providers. But if you do go out-of-network, you end up paying a lot more. You don’t need to choose a PCP, and no referrals are required in order to see a specialist.
- Exclusive Provider Organization (EPO) This plan is generally the same as a PPO, except that you can only choose doctors in-network.
- Point of Service (POS) A hybrid between an HMO and a PPO. Like a PPO, you can choose from in-network or out-of-network providers. Again, you pay more if you go out-of-network. Otherwise, if you stay in-network, plan benefits are copay based (like an HMO.) You may need referrals from a PCP to see specialists.
- High Deductible Health Plan (HDHP) There are a variety of plans that fit into this category, including PPO and EPO. For a lower monthly premium, these plans feature a high deductible, the amount you must pay for select (or all) medical services each year, before the insurance company starts to cover the costs.
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Note: An HDHP PPO plan generally features two deductibles, in-network and out-of-network. The out-of-network deductible is usually 2x the amount of in-network! The out-of-network deductible does not count towards the in-network and vice versa.
- HSA qualified High Deductible Health Plan (HDHP with HSA) or Consumer Directed Health Plan (CDHP) with HSA This features an annual deductible that applies to all plan benefits. Once the deductible has been met, the insurance company pays 100% of the healthcare costs.
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