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Choosing a health insurance plan

We have you covered with this guide. It will help you understand the different plans so you can choose one that fits your needs and budget. You’ll know all your options so you can feel more confident about making the right decision.

Key takeaways: Types of plans you can choose from

 

  • HMO: A budget-friendly plan with lower monthly payments and one main doctor who refers you to specialists. You need to use in-network doctors since HMOs only cover in-network care.
  • EPO: These plans have a larger network than HMOs. They cover only in-network care and may or may not require referrals. The premiums are higher than HMOs but lower than PPOs.
  • POS: These plans balance cost and flexibility. You could get out-of-network care at a higher cost. Sometimes you may need a referral from a primary care physician (PCP).
  • PPO: These are the most flexible plans. You can see specialists and out-of-network doctors without referrals. But they come with higher monthly premiums.
  • HDHP with HSA: This type of plan comes with low monthly premiums and high deductibles. You get a tax-advantaged savings account to help you save money for future health care expenses.
 

Helping you make sense of it all

Health insurers use a lot of acronyms like HMO and PPO. Then there are terms like “deductible” and “copay.” You may wonder if you’re the only one who’s confused. You’re not alone. A recent survey by Forbes reports almost 56 percent of respondents feel confused when trying to understand health insurance.*

HMO: Budget-friendly plan

A health maintenance organization (HMO) plan is one of the least expensive options. It has lower monthly costs and lower deductibles. It often has set fees for doctor visits. You need to use doctors in the network. And you need to choose a primary care physician (PCP) who will manage your care and refer you to specialists.

 

Best for those who want:

 

  • The lowest premiums when compared with other plans
  • Consistent and coordinated care

 

Things to consider:

 

  • You may have a limited provider network.
  • You need a referral to see specialists.
  • You pay the full cost for out-of-network care.
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EPO: Larger network means more convenience

An exclusive provider network (EPO) plan only covers care from doctors in its network. But the network is usually bigger than an HMO network. You might need a referral from your main doctor, or you might not. Premiums are higher than HMOs but lower than PPOs.

 

Best for those who want:

 

  • To pay lower premiums than PPO plans
  • A large network of doctors for in-network care

 

Things to consider:

 

  • EPOs are a good choice if your preferred doctors and hospitals are in the plan’s network.
  • You can only see providers in the plan network.
  • You will need to pay the full cost for out-of-network care.
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POS: An affordable plan with out-of-network coverage

A point of service (POS) plan is like an HMO but more flexible. You might still need a referral from your PCP to see a specialist. But you can also see doctors who are out of your network. Out-of-network care will cost more.

 

Best for those who want:

 

  • More flexibility than HMOs
  • Lower premiums than PPOs
  • The flexibility to see out-of-network providers

 

Things to consider:

 

  • You may have higher out-of-pocket costs for out-of-network care.
  • You may still need a PCP for coordination of care.
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PPO: The plan with the most freedom

A preferred provider organization (PPO) plan has higher monthly costs but gives you the most choices. You can visit specialists and doctors outside the network without needing a referral. When you see doctors in the network, your copays and coinsurance are lower than care from outside the network.

 

Best for those who want:

 

  • A broad network of providers
  • The ability to choose any doctor, in network or out, without a referral

 

Things to consider:

 

  • This plan is good if you don’t mind higher premiums and want the flexibility to see any doctor.
  • You’ll pay more for out-of-network care.
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HDHP with HSA: Offset out-of-pocket costs

A high-deductible health plan (HDHP) has lower monthly costs but higher costs when you first get care. It often comes with a health savings account (HSA). This lets you save money before taxes to pay for health care.

 

Best for those who want:

 

  • Lower monthly premiums
  • A tax-free savings account for current and future health care expenses

 

Things to consider:

 

  • This plan is best for those who are willing to pay higher out-of-pocket costs in the form of a deductible before their benefits kick in. They could use the tax-free money they’ve saved in their HSA to cover the cost of care.
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Bottom line:

 

Each plan type has its own set of advantages and things to consider. For instance:

 

  • The size of the network
  • Whether you need a referral to see a doctor
  • Cost-sharing amounts

 

When you understand these key differences, you can choose the plan that best fits your health care needs and budget.

 

Content developed using AI and reviewed and edited by Aetna®.

Legal notices

Aetna is the brand name used for products and services provided by one or more of the Aetna group of companies, including Aetna Life Insurance Company and its affiliates (Aetna).

Health benefits and health insurance plans contain exclusions and limitations.

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