Plan types explained
Health plans are often referred to as their acronym, with some of the most common being HMO, POS, PPO, HDHP and HSA. But what do those acronyms really mean? We’ve created some basic explanations of each plan type to help you understand just that.
Health maintenance organization (HMO)
HMO plans require members to have an in-network primary care physician (PCP) that acts as their main point of contact for medical services. HMO plans don’t include care that is received out of network, except for in the case of emergencies. So if you have an HMO plan, make sure you’re staying in-network so you don’t pay more than you need to for care.
Preferred provider organization (PPO)
With PPO plans, the definition is in the name: they have a preferred network of providers. Members with a PPO plan don’t need to designate a PCP, and in turn, also don’t need a PCP to give them a referral to see a specialist. Similar to other plans, members pay higher out-of-pocket costs when they choose to get care outside of the PPO network. But, PPO plans tend to have larger networks and are best known for their flexibility. Because of this, they tend to have higher premiums.
Point-of-service plan (POS)
POS plans can be considered as a mix of an HMO and a PPO plan. POS plans give members the option to choose from providers inside or outside of their network. Generally, in-network care will cost the member less. An out of network doctor may charge a higher fee for medical services. POS plans tend to be ideal for members who would like to have a PCP in-network but also want to be able to go out of network for additional care.
HMO, PPO, and POS plans can all be high deductible health plans, or HDHPs.
High-deductible health plan (HDHP)
HDHPs are exactly as they sound: they’re a health plan that has a high deductible. These plans are commonly paired with health savings accounts in order to help members get the most out of their dollars whenever they need to pay for medical expenses. And although the member has a higher deductible, their monthly premium is generally lower in cost.
Health savings account (HSA)
Health savings accounts aren’t health plans, but they can be paired with high-deductible health plans (HDHPs) to help cover medical expenses. In order to have an HSA, members must have an HDHP and fall under specific requirements. A great feature of HSAs is that the money put into them isn’t subject to income tax and when that money is spent on qualified medical expenses, it’s not subject to tax, either. The money within an HSA will roll over year-to-year if it’s not spent. An HSA is like your own personal savings account to only be used for health care expenses like copays, new glasses or contacts, prescriptions and more.
Looking for more information on HSAs? Read more.
Not sure what plan type you have?
To learn more about your specific plan type, log in to your account to access your plan documents, check for your plan type on your member ID card or call the number on the back of your member ID card.