Types of Health Insurance

When shopping for health insurance, you may notice some acronyms you’re not familiar with such as HMO, PPO, HDHP, EPO and POS. Our billing department outlines below what they stand for and what it means for you!

Health Maintenance Organization (HMO)

An HMO delivers all health services through a network of healthcare providers and facilities. With an HMO you may have:

• The least freedom to choose your health care providers
• The least amount of paperwork compared to other plans
• A primary care doctor to manage your care and refer you to specialists when you need one so the care is covered by the health plan; most HMOs will require a referral before you can see a specialist.

Preferred Provider Organization (PPO)

With a PPO, you may have:

•  A moderate amount of freedom to choose your health care providers — more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist.
• Higher out-of-pocket costs if you see out-of-network doctors vs. in-network providers
• More paperwork than with other plans if you see out-of-network providers

Exclusive Provider Organization (EPO)

With an EPO, you may have:

• A moderate amount of freedom to choose your health care providers — more than an HMO; you do not have to get a referral from a primary care doctor to see a specialist.
• No coverage for out-of-network providers; if you see a provider that is not in your plan’s network – other than in an emergency – you will have to pay the full cost yourself.
• Lower premium than a PPO offered by the same insurer

Point-of-Service Plan (POS)

A POS plan blends features of an HMO with a PPO. With POS plan, you may have:

• More freedom to choose your health care providers than you would in an HMO
• A moderate amount of paperwork if you see out-of-network providers
• A primary care doctor who coordinates your care and who refers you to specialists

High-Deductible Health Plan With or Without a Health Savings Account

Similar to a catastrophic plan, you may be able to pay less for your insurance with a high-deductible health plan (HDHP). With an HDHP, you may have:

• One of these types of health plans: HMO, PPO, EPO, or POS
• Higher out-of-pocket costs than many types of plans; like other plans, if you reach the maximum out-of-pocket amount, the plan pays 100% of your care.
• A health savings account (HSA) to help pay for your care; the money you put in an HSA is not taxed and can be used tax-free on eligible medical expenses. In order to have a HSA, you must be enrolled in a HDHP.

Catastrophic Plan

If you are under the age of 30 you can purchase a catastrophic health plan. With a catastrophic health plan you may have:

• Lower premiums
• 3 primary care visits before the deductible applies
• Free preventive care, even if you haven’t met the deductible

Terms to Know

Once you have insurance, there is even more insurance lingo to learn! Below are some common insurance terms to familiarize yourself with.

What is the difference between a co-pay and co-insurance?

Coinsurance is a form of cost sharing for health services or prescription drugs between insurance companies and the insured. Unlike copays, which are flat fees, coinsurance is a percentage of the cost for a health service or prescription drug paid by a member after they have reached their deductible. Copays are paid up front. An example would be paying $25 at your doctors appointment. Coinsurance is paid after the visit. For example, you may receive a bill for 20% of the total doctor visit- your insurance will have paid the other 80%.

What is the difference between a deductible and a copayment?

A copay is a fixed amount paid by a patient for receiving a particular health care service, with the remaining balance covered by their insurance company. Typically, copays range between $25 and $50. Some services, like annual wellness visits, you can receive without being responsible for paying the copay. A deductible is a fixed amount a patient must pay during a given time period, usually a year, before their health insurance benefits begin to cover the costs. An example would be a deductible of $1,000. Again, some services you can receive without having to meet this cost while others you do.

For questions or help applying for health insurance please contact one of our Certified Application Counselors at 434-929-1400 ext. 1140.