Chris Kissell has been a journalist for three decades and has written extensively about insurance and other personal finance topics for the past 20 years. For the last 14 years, he has been a full-time freelance writer and editor, contributing to sit.
Chris Kissell Insurance WriterChris Kissell has been a journalist for three decades and has written extensively about insurance and other personal finance topics for the past 20 years. For the last 14 years, he has been a full-time freelance writer and editor, contributing to sit.
Written By Chris Kissell Insurance WriterChris Kissell has been a journalist for three decades and has written extensively about insurance and other personal finance topics for the past 20 years. For the last 14 years, he has been a full-time freelance writer and editor, contributing to sit.
Chris Kissell Insurance WriterChris Kissell has been a journalist for three decades and has written extensively about insurance and other personal finance topics for the past 20 years. For the last 14 years, he has been a full-time freelance writer and editor, contributing to sit.
Insurance Writer Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
| Deputy Editor, Insurance
Updated: Nov 23, 2023, 6:06am
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When shopping for health insurance, it is easy to get lost in an alphabet soup of plan types: PPO, HMO, EPO—what does it all mean?
These are all acronyms for types of health plan benefit designs. A plan’s benefit design dictates how you get care and influences health insurance costs. Understanding the differences between these plans is crucial to finding the best health insurance plan for you at an affordable price.
A preferred provider organization (PPO) health care plan offers the flexibility to get health care outside of your provider network and see a specialist without a referral from a primary care provider.
Getting care outside your provider network gives you more choices than other health plans, but that freedom comes at a price. Out-of-network care typically costs more than if you get care in-network.
PPOs also typically have higher health insurance premiums than other insurance plans.
Members with health maintenance organization (HMO) coverage are limited to seeing in-network providers who either work directly for or contract with the HMO. Typically, your primary care physician coordinates most of the care you receive when you have an HMO. For example, you likely will need a referral to see a specialist.
An HMO won’t cover your care if you go outside the plan’s network, except if you need emergency care.
HMO plans generally have lower health insurance premiums than other types of health insurance, but those savings come with a strict provider network.
In an exclusive provider organization (EPO) plan, you’re only covered if you use physicians, specialists or hospitals within the plan’s network, although you will be covered for emergency care regardless of the service provider’s network affiliation.
Unlike an HMO, you likely won’t need a referral to see a specialist. Also, unlike an HMO, doctors don’t work for or contract with the EPO. Instead, the EPO negotiates lower rates with providers that are passed on to policyholders when you need health care services.
With an EPO plan, you typically pay less in premiums than in a PPO plan but more than you would in an HMO.
A point-of-service (POS) plan has aspects like a PPO but others similar to an HMO. POS members pay less for their care when they visit a medical provider inside the plan’s network.
However, they also can seek care outside the network. You will need a referral to receive care outside the plan’s network and pay an extra cost for using this type of provider.
You also need a referral to see a specialist.
A high-deductible health plan (HDHP) has an annual health insurance deductible of at least $1,400 for an individual or $2,800 for a family in 2022. A plan considered high deductible will increase to $1,500 for an individual and $3,000 for a family in 2023.
Your total annual out-of-pocket costs for in-network services for a high-deductible plan can’t be more than $7,050 for an individual or $14,100 for a family in 2022. In 2023, out-of-pocket maximums will jump to $7,500 for an individual and $15,000 for family coverage.
HDHP premiums are typically low, but the high deductible means your out-of-pocket costs can be high if you need regular medical care in a given year.
One of the big advantages of an HDHP is that you can pair it with a health savings account (HSA), which allows you to save for and pay for medical services tax-free.
Unlike the other types of plans, a high-deductible health plan isn’t a benefit design. It strictly means you have a high deductible. HDHPs can actually be any type of benefit design—PPO, HMO, EPO or POS.
There is no single best type of health insurance. Each plan has its pros and cons, and the right plan depends on what you need out of health insurance coverage.
Comparing and contrasting the various types of plans can give you a better sense of which type of benefit design makes the most sense for you.
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Insurance WriterChris Kissell has been a journalist for three decades and has written extensively about insurance and other personal finance topics for the past 20 years. For the last 14 years, he has been a full-time freelance writer and editor, contributing to sites such as Forbes, U.S. News and World Report, Money Talks News, Bankrate, GoBankingRates, FinanceBuzz and more. His work has also appeared on MSN, Fox Business and Yahoo Finance.
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