Health insurance companies use many acronyms like HMO, PPO, and specialized terms like “deductible” and “copay.” You may be wondering if you’re the only one who’s confused. Good news, your not. These terms can be confusing to understand, but we will break them down for you.
A Health Maintenance Organization (HMO) plan is one of the cheapest types of health insurance. It has low premiums and deductibles and fixed copays for doctor visits. HMOs, require you to choose doctors within their network. When you sign up for the plan, you’ll select a primary care physician (PCP) whom you’ll see for regular checkups. Your PCP will need to give you a referral before you can see a specialist. HMOs are an excellent choice if you’re on a tight budget and don’t have many medical issues.
As with an HMO, a Point of Service (POS) plan requires that you get a referral from your primary care physician (PCP) before seeing a specialist. But for slightly higher premiums than an HMO, this plan covers out-of-network doctors. This is a significant difference if you manage a condition and one or more of your doctors are not in your network.
An Exclusive Provider Organization (EPO) is a lesser-known plan type. Like HMOs, EPOs cover only in-network care, but networks are generally larger than for HMOs. They may or may not require referrals from a primary care physician. Premiums are higher than HMOs but lower than PPOs.
A Preferred Provider Organization (PPO) has pricier premiums than an HMO or POS. But this plan allows you to see specialists and out-of-network doctors without a referral. Copays and coinsurance for in-network doctors are low. If you know you’ll need more health care in the coming year and you can afford higher premiums, a PPO is a good choice.
HDHP with HSA
A High Deductible Health Plan (HDHP) has low premiums but higher immediate out-of-pocket costs. Employers often pair HDHPs with a Health Savings Account (HSA) funded to cover some or all of your deductible. You may also deposit pre-tax dollars in your account to cover medical expenses, saving you about 30%. And remember, depending on your age, services such as mammograms, colonoscopies, annual well visits, and vaccinations may be covered free of charge, even if you haven’t met your deductible. Learn more about preventive care.
An HDHP can be an HMO, POS, PPO, or EPO. People who manage a health condition but can’t afford higher monthly premiums may find that an HDHP saves them money in the long run.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.