Comparing Healthcare Plans

May 1, 2023

When it comes to healthcare, there are many options on the market. Healthcare providers and insurers are aware different individuals will have different priorities, medical needs, budget constraints, and so on. As such, there is a constellation of health insurance services offering different coverage options, price levels, deductibles, and in-network versus out-of-network options for primary and specialized care. Insurers perpetually balance medical and ethical considerations with the financial restrictions and realities that prevent unlimited healthcare for low prices, as it would quickly bankrupt the providers.

Let's review these options now.

Point-Of-Service Plans

First, we come to point-of-service (POS) plans, which are based on a primary care physician and a network of providers. Primary care physicians are the patient's first stop for healthcare, with referrals to in-network specialists covered to a great extent by the point-of-service plans. A point-of-service plan does not limit a customer to only referred specialists or in-network providers, but out-of-network providers or visits outside of a referral by the primary will incur a greater out-of-pocket cost. In exchange for this mild in vs. out-of-network distinction and the importance of referrals in getting maximum coverage, POS plans are rather affordable.

Continue reading to learn about maintenance organizations.

Health Maintenance Organizations

Health maintenance organizations (HMOs) are a widespread and popular option for health insurance. These plans offer relatively low premiums and deductibles while making use of referrals and in-network providers. A primary physician makes an initial assessment of a patient, and, if needed, issues a referral to an in-network specialist. The primary care physician and HMO provider work together to make sure referrals meet medical needs without compromising budgetary and coverage limits that keep HMO costs low. Note unlike POS plans, HMOs will not offer any financial assistance to out-of-network doctors or specialist treatment obtained without a referral.

Move onto exclusive providers next.

Exclusive Provider Organizations

Exclusive provider organizations (EPOs) are relatively unknown but offer another opportunity for care in the network and referral interplay. EPOs emphasize the 'exclusive' in its name. Out-of-network providers are not covered, as with HMOs. However, in-network specialists and primary care physicians can be visited without a referral, which adds more flexibility than the typical HMO plan. With EPOs, the quality and breadth of in-network primaries and specialists are paramount. Saving money on an EPO with a more scant network will very likely not pay off since any out-of-network care, no matter how justified from a medical perspective, is not contractually covered. As with other out-of-network disincentives, this is done to keep the EPO financially viable and give customers reasonable prices for in-network coverage.

It's time to talk about preferred provider organizations. Keep reading for more!

Preferred Provider Organizations

Preferred Provider Organizations (PPOs) are not nearly as strict when it comes to in-network care, though customers would still be wise to stick to in-network providers when possible. As far as direct cost in terms of premiums and copays, PPOs are at the higher end of the spectrum. However, the 'you get what you pay for; dictum applies here since the higher cost is offset by no referral requirement and generous coverage for in-network providers. Even out-of-network providers, though not covered to the same extent, are provided some cost-offset measure in contrast to the 'all or nothing' approach of EPOs and HMOs.

Need high deductions? Continue reading for the next plan.

High-Deductible Health Plans

High-Deductible Health Plans (HDHPs) focus on a different variable to control costs without compromising care quality. As the name suggests, the deductible on these plans can be much higher, to the tune of thousands of dollars, then on comparable coverage from other plans. As a legislative incentive to lighten the burden of meeting that deductible, money specifically set aside for HDHP deductibles in an associated health savings account is not subject to Federal taxation. In exchange for this heavy deductible restriction, HDHPs offer lower premiums than comparable insurance from other coverage types, out-of-network care is much more likely to be covered to a greater extent, and the customer gains tax savings from money in HSA accounts.

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