What is the difference between HMO, PPO, HDHP, POS, EPO?

What's right for you for a health insurance plan?

The response to that question depends on many factors relating to your particular situation. Taking these considerations into consideration when comparing health plan options:

• Health of you
• Health of your family
• Your health care providers and whether they accept the insurance
• Your financial statements
• If you want to pay more early by premiums, but more out of pocket expenses while you are using health insurance — or vice versa
• If you want a bigger network provider
• If you don't want to see a skilled person

If the variables are examined, it is much easier to choose a health plan.

The five most common types of health insurance plans are:

• Preferred provider organizations (PPOs)
• Health maintenance organizations (HMOs)
• High deductible health plans (HDHPs)
• Point of service plans (POS)
• Exclusive provider organization plans (EPO)

In the employer-fostered health insurance industry, PPOs are the most popular form of health plan, while HMOs lead the way in the single insurance market. In the last decade, HDHP is a low-cost health insurance program for employers, which makes up around one/third of employer-supported policies. POS and EPO Plans, although not as popular as HMO, PPO or HDHP, are options.

In this guide, we provide information about each of these plans to help you make the right decision for your circumstances. We will go through each of the five plan types and highlight the differences:

What is PPO?

PPO stands for preferred-provider organization. In general, PPO premiums are much more than HMO and HDHP but are more flexible.

47% of employer-based health plans enrolled are in a PPO. In the individual market, PPOs are also very uncommon. PPOs account for just 16% of individual plans.

Typically, in a PPO contract, you do not need to choose a primary care provider. A PPO also has greater choices than an HMO for a health care provider. PPOs allow you to get in- and out-of-network services – even if it costs more for out-of-network providers. Without a reference, you can also see a specialist.

While a PPO gives you more independence, it doesn't make you fully accessible without supervision. You and a doctor will also need an approval for an expensive service such as an MRI in a health plan. This is called a prior permit, often used in healthcare.

The average annual allowance for a single PPO coverage plan is $1.204 reported by the Kaiser Family Foundation. Your insurer will begin collecting his part of the coinsurance until you arrive at your deduction.

The policies also provide for a limit of out-of-pocket in-network support. Your insurance will cover all expenses if you hit your out-of-pocket limit. The maximum out-of-bag will vary greatly, so you need to ensure that you have the maximum out-of-bag for your plan.

The key advantage of a PPO is flexibility, but it costs higher premiums and a deduction, which you have to pay before the insurance company begins to pay for the treatment.

If a PPO is for you correctly:

• You want freedom to leave the network and do not have to get referrals.
• You are more concerned with flexibility than paying higher premiums.
• When you need attention, you want to pay higher fees at possibly lower out-of-pocket costs.

What kind of person should opt for a PPO: Someone who frequently uses healthcare and sees specialists or who wishes to see a specialist without a referral.

What is HMO? 

HMO stands for health maintenance organization and makes up 13% of employer health plans, but about half of marketplace plans. It is renowned for its lower premiums than PPOs and a narrow network of physicians and hospitals. This smaller network would result in versatility being sacrificed at lower costs.

Compared to a PPO you would probably pay significantly lower HMO premiums.

HMOs need a PCP that "coordinates" care to be called. In order to see a specialist, your primary doctor must first refer you. A deductible may be available to HMOs but this is less than other plans. For individual coverage, the annual deductible is $1,201. In recent years, health insurers have increased the deductibility of HMO more quickly than most plans.

One disadvantage of an HMO is that these plans do not normally allow you to leave your network. If so, you're paying for self-care. An exception is when you need emergency services, which need an in-network accounting device (but not usually the providers).

Not everybody accepts HMOs. Make sure that your supplier or suppliers prepare ahead of selecting an HMO.

If an HMO is right for you:

• You have a primary health care practitioner and other HMO network providers.
• You don't see many experts and sometimes don't need references.
• You don't care about the drawbacks of just seeing network providers.
• Lower premiums are more important to you than flexibility.

What kind of person should opt for a HMO: Someone who wants to pay in premiums as low as possible so does not have to face high deductibles. If you have a PCP and other medical care professionals are also in the HMO, an HMO might be a good choice.

What is HDHP? 

HDHP stands for high-deductible health plan. As more employers offer plans to reduce healthcare costs, HDHPs are increasingly common.

31% of the employed have an HDHP. Business HDHP plans are known as bronze or silver plans. Setting a bronze or silver target is 76% for those with a business plan.

An HDHP only defines deductible and non-pocket expenses. A PPO or HMO gain design can be provided by an HDHP. The heavy deductible is what makes an HDHP a high deduction package.

The HDHP is described as a health plan with a person deductible of minimum $1,400, and a family $2,800. Before your health insurance chips in you must pay the cost for treatment.

The HDHP deduction is an average of $2,303, although the Kaiser Family Foundation notes that many plans are over $3,000.

The out-of-pocket costs of an HDHP network cannot exceed 7000 dollars per person and 14,00 dollars for a family.

If you want this package, you may want to remember it and, if you need it, you can subtract money for it.

After you arrive at the deductible, the insurer will start paying your part and paying your premium percentage. Once you have reached your bag limit, your insurer will cover all expenses.

HDHP normally has lower premiums, which means that you do not require all of the medical treatment, but they may be a cheaper plan choice. If you are young and safe, HDHPs may be a good idea but it might be expensive for elderly adults or young families.

Also interesting is that HDHPs usually have a health care savings account. An HSA will save you money for eligible medical costs before taxation. Some employers seed money into HSA employee accounts so that you can see how your company gives money to HSA employees when you decide on a health care package.

Before deciding on HDHP, think about possible health insurance costs in the next year and see if the reduced premiums more than compensate for potential health care costs.

If you have an HDHP right:

• You have no many expenses for health insurance, and in the next year you do not expect a lot of costs.
• In the awareness that the higher deductible means you're paid out of the hands more if you need help, you'd rather pay less upfront costs.
• You have no children and/or a partner with several healthcare facilities in your plan.

What kind of person should opt for a HDHP: Someone who's healthy and won't need many health facilities in the next year. You want the least expensive premiums and do not care if you need care.

What is POS?

POS stands for point of service plan and makes up only 9% of health plans.  Hybrid PPO and HMOs are the POS plans. Indeed, point of service means that any time you see a provider, the health user can choose whether to use HMO or the PPO services.

POS plans normally have HMO-like guidelines. You need, for example, to choose an in-network doctor as your PCP. But a non-network physician can be seen in a POS package at a higher cost.

If a POS might be right for you:

• In the POS strategy you have a PCP.
• You want versatility to leave the Network like a PPO — and don't care whether you have to pay higher out-of-pocket charges.
• You are excellent at maintaining receipts for health insurance. If you get care of the network, you don't mind completing forms and submitting payment accounts.

What kind of person should opt for a POS: Someone who likes to leave the network, but needs to have a PCP to coordinate the treatment as well.

What is an EPO?

EPO stands for exclusive provider organization and is a managed care plan that requires you to go to doctors and hospitals in the plan’s network.

In this sense, you do not have to select a PCP or need a PCP reference, but only the network provider coverage is available to you. Other elements of an EPO plan are like an HMO, for example a small doctor/hospital network. And in an emergency, you can't get treatment outside of the network.

Like a PPO, you need your health plan's permission to obtain what is considered to be a costly service.

If you think an EPO is right:

• You want PPO versatility and do not need a referral when you are in the network.
• You're in a position to have a small network of physicians and institutions like an HMO.
• You want a network like an HMO, but don’t want to choose a PCP.

What kind of person should opt for an EPO: A individual who doesn't care has a small range of doctors and facilities and doesn't want to get a specialist referral.

What is the difference between HMO, PPO, HDHP, POS and EPO?

This is an open season for registration and the employer can choose from the three largest forms of plans: HMO, PPO and HDHP. Which is best? It really depends on your financial and medical situation – and preferences.

Do you want the flexibility, for example, not to go to a smaller group of HMO providers and do you have to pay your treatment more early through premiums? Then maybe for you a PPO is right.

Do you not care for a vast network of providers, nor do you want to ensure that you pay for healthcare as least as possible? An HMO would then be fine.

Don't you also use health insurance and want a package that covers you but does not cost a great deal in terms of premiums at first sight? The direction to be taken will then be an HDHP.

It is a decision that depends on your circumstances and interests to choose the appropriate health insurance plan. Regarding prices, versatility, coverage and ease in making the decision, whether you want a PPO, HMO, HDHP, POS or EPO in the last minute.

Here is the average premium for each plan and how the plans vary with regard to referrals and off-line support:

Kaiser Family Foundation, 2020 Employer Health Benefits Survey. Note: The survey did not include the average premium or deductible amounts for an EPO.