Understanding your health insurance

Understanding your health insurance is important when choosing a policy. There are several different types of health insurance policies, and understanding the differences between them will help guide you when deciding which policy may be right for you.

The most common types of health insurance policies are Health Maintenance Organization (HMO), Exclusive Provider Organization (EPO), Preferred Provider Organization (PPO), and Point of Service (POS) plans. It is important to know what type of policy you have because the type of plan you choose will determine how you can access doctors and hospitals and how your coverage works when you go out-of-network.

A distinguishing difference between a Point of Service (POS) and a PPO plan is that a POS generally requires referrals from your primary care physician in order to see a specialist.

The differences between an HMO, EPO and a PPO are fairly simple.

With an HMO policy, you generally must use in-network doctors and hospitals in order for your services to be covered, except in certain situations such as emergencies. If you receive care from an out-of-network provider, those charges may not be covered by your insurance and could become your responsibility.

An EPO will typically have a larger network than an HMO and generally does not require a referral to see a specialist. Like an HMO, however, an EPO generally does not provide coverage for out-of-network services, except in certain situations. This means that receiving care from an out-of-network provider can leave you responsible for significant medical bills. HMO and EPO plans will often have stronger low-end benefits, such as lower copays for certain in-network services.

A PPO policy provides coverage for both in-network and out-of-network services. This gives members more freedom when choosing doctors, hospitals, and other medical facilities, even when the provider is considered out-of-network.

One of the major advantages of a PPO is that covered out-of-network services are generally subject to a defined out-of-pocket maximum. This provides a limit on your financial responsibility for covered services under the plan.

This is an important distinction when comparing health insurance policies. With an HMO or EPO, out-of-network services that are not covered by the plan generally do not count toward your plan's out-of-pocket maximum. This can leave you with potentially significant financial responsibility if you receive care outside of the plan's network.

When choosing health insurance, don't just look at the monthly premium or the copay. It is important to understand what happens if you need to see a doctor who is out-of-network, need specialized treatment, or need to go to a hospital that is not part of your plan's network. In-Network hospitals can also have doctors outside of your network, complicating things further if you don’t have a PPO.

Knowing whether you have an HMO, EPO, PPO, or POS plan is an important first step in understanding your health insurance and making sure you have the type of coverage that fits your needs.