Frequently Asked Questions About Types of Health Insurance Plans
What Is an HMO?
HMO stands for health maintenance organization. An HMO is a type of health plan that requires you to select a family doctor, often called a primary care physician or PCP. You need a referral from your PCP to see a specialist in the HMO network, such as a cardiologist (heart doctor). Typically, only emergency services are covered if you go outside the health plan network. Learn more about the HMO plans offered by Independence Blue Cross and how they work.
What Is a PPO?
PPO stands for preferred provider organization. A PPO is a type of health plan that allows members to see providers in and out of the network. You pay lower costs when you see network providers. But you can go outside the network and pay more for your services. Learn more about the PPO plans offered by Independence Blue Cross and how they work.
What’s the Difference Between HMO and PPO Plans?
In an HMO, you choose a family doctor, called a primary care physician (PCP), who provides the services you need. Your PCP refers you to other doctors or health care providers within the HMO network when you need specialized care. Typically, only emergency services are covered if you go outside of the plan network. HMOs usually have the lowest premiums.
In a PPO, you don’t have to choose a primary care physician (PCP), and you can go to doctors in or out of the health plan’s network. You can see doctors, hospitals, and other health care providers of your choice, such as a heart doctor, but you will pay more if your doctor does not participate in your health plan’s network. PPOs tend to have higher premiums than HMOs.
You can use the Independence Blue Cross plan comparison tool to find a health plan that best matches your needs, view your lowest cost plan, and/or a plan that is most popular for individuals like you.
What Is an EPO Plan?
EPO stands for exclusive provider organization. These health plans combine the flexibility of PPO plans with the cost-savings of HMO plans. They offer in-network coverage only, but don’t require you to select a primary care physician (PCP) or get referrals. EPO plans don’t cover out-of-network care unless it’s an emergency.
What Is a Point-of-service (POS) Plan?
A POS plan combines elements of an HMO and a PPO. As with an HMO, you will need to select a primary care physician. But like a PPO, you can receive medical care from both in- and out-of-network providers. You’ll pay less when you get a referral to an in-network doctor or hospital, and more if you choose an out-of-network doctor or hospital.
What Is a Tiered Network Plan?
In a tiered network plan, the network of doctors and hospitals is divided into groups called “tiers” based on cost and quality measures. You can save on your out-of-pocket costs by choosing the lowest-cost tier, but you always have the option to choose providers in the other tiers (you’ll just pay more). For example, you may pay only a $15 copay to see a doctor in Tier 1, $30 for a doctor in Tier 2, or $50 for a doctor in Tier 3. This type of plan may be a good option if your doctors and hospitals are already in the lowest-cost tier, or if you don’t mind switching providers to save money.
What Is a Consumer-driven Health Plan (CDHP)?
CDHPs are becoming more popular because they give people control over how their health care dollars are spent. A CDHP generally pairs high deductibles with low premiums and a spending account to help you set aside money for health expenses. There are several different types of spending accounts available, such as health savings accounts (HSAs), health reimbursement accounts (HRAs), and flexible spending accounts (FSAs).
What Is a Health Savings Account (HSA)?
An HSA lets you save money for qualified medical expenses, tax-free. You don’t pay taxes on the money you put in, the money you take out (for qualified medical expenses), or any money you earn on the account. The IRS determines what qualifies as a qualified medical expense, which includes your out-of-pocket costs (copays, deductibles, coinsurance), along with some services not covered by a health plan, such as Lasik surgery. Insurers can only offer an HSA with a special type of high deductible health plan which meets guidelines set by the IRS. With an HSA, you own the account even if you change to a different type of health insurance plan or change jobs.