Understanding Health Plan Options

All three of the most common health plan types, preferred provider organizations (PPO), health maintenance organizations (HMO), and high-deductible health plans (HDHP), will cover your health care costs, but determining which plan is right for you and your family requires more of a deep dive into each option.

PPOs allow you to visit both in- and out-of-network providers, giving you the widest range of options when it comes to care. However, premiums for PPOs tend to be higher, and out-of-network care will cost more out-of-pocket than in-network care.

HMOs often have lower premiums than other plans and offer set fees for certain types of health care. However, they have more limited provider networks, and a referral is required to see any specialists.

HDHPs also often have lower premiums than other plans, but, as their name suggests, have much higher deductibles to meet. To offset this, HDHPs allow you the option of opening a health savings account (HSA), which is a tax-advantaged account that can help cover the out-of-pocket costs.

One of the biggest differences between these plan types is how high the deductible is. The video below explains what a deductible is.

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