When you compare your health insurance options on the Marketplace, the first thing you will probably notice is the cost. However, there are other important factors to consider when choosing a plan. One of them is deciding between an HMO and PPO – and identifying what type of services you want within your provider network. Here’s a quick orientation to help you make your decision plus a FREE guide that you can save and refer back to later.
What’s a Provider Network?
This term refers to the group of providers (doctors, pharmacies, hospitals, therapists, etc.) whose services are covered by your health insurance plan. A larger provider network means you have more choices when it comes to choosing a primary care provider or a specialist. This can be important if you need medical care while you’re away from your home. Or if you want to have more options when it comes to seeing a specialist.
How do referrals work?
Different types of networks also have different rules about whether you can contact a specialist on your own. Or whether your primary care doctor is the gatekeeper who decides if you need a specialist. Of course, you are free to pick up the phone and make an appointment with anyone you’d like. However, it’s important to know a plan that requires a referral won’t cover the cost of the appointment without your primary care doctor’s seal of approval, first.
What are the different types of plans?
Now that the basic concepts of provider networks and referrals have been explained, it’s time to take a look at a few different types of plans.
HMO (Health Maintenance Organization)
An HMO gives you access to medical providers and hospitals within its network. The network is a collection of medical providers and health care facilities that have met the standards of the insurance company and have agreed to reduce their rates for network members. Medical coverage is restricted to providers who are in-network. If you visit a doctor or hospital out-of-network, your insurance company will not cover any medical expenses.
As an HMO member, you need to choose a Primary Care Provider or “gatekeeper” who will refer you to specialist doctors (cardiologist, dermatologist, pathologist, etc.). Your Primary Care Provider serves as your health advocate — someone who will check to see what medical issues you have and refer you to appropriate specialized care providers. That way, you can be sure that you are visiting the right type of doctor every time you have a potential medical issue.
The HMO is a good choice if you:
- Would like a central doctor who will serve as a coordinator for specialist care
- Are not tied to particular doctors that are outside of the HMO network
- Don’t typically need medical care when you’re out of town
- Are looking for the most affordable monthly premium within a certain insurance company
PPO (Preferred Provider Organization)
With a PPO plan you have more flexibility in choosing a doctor or hospital. Like an HMO, a PPO has a network of doctors that will be covered under your plan’s benefits. You can also see doctors outside of the PPO network but it’s likely you have to pay more for these visits. There is no mandatory Primary Care Provider and you can see specialists that you choose without needing a referral.
The PPO is a good choice if you:
- Are often out of your provider’s area of medical coverage
- Desire more flexibility when selecting specialists
- Want to continue seeing a doctor who is outside of all available networks
Pro Tip: Wondering how much each plan will cost per month? Use the HealthSherpa enrollment tool to compare plans and prices.
Besides an HMO and PPO, there are a couple of other plans to consider:
POS (Point of Service)
A POS plan uses a Primary Care Provider to refer you to in-network and out-of-network doctors. It will normally cost more to see out-of-network doctors. This type of plan is considered an HMO plan with more out-of-network coverage.
The POS is a good choice if you:
- Would like a Primary Care Provider to coordinate your specialist care
- Would like the option of seeking out-of-network care
EPO (Exclusive Provider Organization)
An EPO has a network of doctors and hospitals that are used exclusively. You don’t need a Primary Care Provider to refer you to specialist care. In this sense, an EPO is similar to a PPO but with a more limited network. If you go outside of the network then your expenses will not be covered by your EPO plan.
The EPO is a good choice if you:
- Prefer choosing and visiting specialist doctors freely
- Are comfortable seeking care in a close-knit network of providers
- Typically do not need medical care when out of town
Two Good Questions to Ask
Don’t worry if you’re still feeling confused. Asking lots of questions will help you sort out your choices. Here are a few to get you started:
- Do I want lots of choices when choosing a provider?
- Do I travel often and want coverage while traveling?
- If I see a provider outside my network, will the amount I pay that provider count toward my deductible and out-of-pocket max?
And don’t forget to grab the FREE guide to use when picking out your plan.