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Making Sense of the Different Types of Plan Structures
What Kind of Plan is Best?
Below are some types of plans you may see while evaluating your options for health insurance. Knowing how each is structured will help you choose the right one for you or your family. Each of these plans require a monthly payment, known as a premium, to maintain coverage. Some will have higher premiums and some will have lower premiums, but the premium amount should not be the only factor you consider. Ease of access, the doctors within their provider network, out-of-pocket costs, and benefit details all impact your cost and convenience using the plan. There is no obvious ‘favorite or best’ plan across the board, instead, each plan type may be geared for a different scenario and medical need. Only you will know what will work best for you.
Consider these major elements of each structure.
Health Maintenance Organization (HMO) Plan – In this plan, your Primary Care Provider (PCP) is who you will need to reach out to first. The insurer requires the PCP to direct your care and be a centralized source for information. If you need care outside of what your PCP can offer, your PCP will be required to provide you and your insurance company proof of a referral for it to be covered. There is a wide variety in provider selection for HMOs, with some with very broad options and some very narrow. HMOs offer no out-of-network coverage (or very minimal) for care received.
Point of Service Plan (POS) Plan – This plan offers a little more flexibility than an HMO if you need to visit a doctor that is not your PCP. You can visit a doctor without engaging your PCP first, but it may impact your out-of-pocket costs. If your PCP makes a referral to a specialist provider, they will likely make them to doctors within your network. However, if they do not, you will likely pay a higher co-pay or coinsurance. To help minimize costs, always request that the doctor makes the recommendation within your network if available.
Preferred Provider Organization (PPO) Plan – This plan also provides the patient access to a network of preferred providers, however, you may visit any of them at any time without receiving referrals first. Your out-of-pocket expenses will be less if you use a provider within the plan, but if you visit a doctor that is out of network, you will still receive some reimbursement from the plan. This type of plan is typically more expensive, but they include a larger network of doctors, including specialist doctors and frequently, include providers from a national network that allows more access outside of your local area. For frequent travelers or those with students out of the area, this can be important.
Exclusive Provider Organization (EPO) Plan – This plan is like an HMO plan in that members are required to use only network doctors. Frequently these providers are part of the same health system or hospital and may not have a lot of variety outside of what that system provides. However, unlike an HMO plan, it is not necessary to select a PCP or contact a PCP for specialist referrals. There is generally no coverage for care revived outside of the provider specified network.
Fee-for-Service (FFS) Plan – This plan type is not as common as the others and is sometimes referred to as an indemnity plan. FFS plans only pay a pre-determined percentage of what is standard pricing in the area for each service received. If you are enrolled in this plan, it is important to keep good track of your medical records, receipts, and total expenses. FFS plans also will require that you meet a yearly deductible before they will begin to pay claims. These plans can pay the medical provider directly or reimburse you after you submit a claim following a visit or service.