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Health Plan Types

  • admin
  • December 7, 2014 8:57 PM
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If you’re trying to sign up for a new health insurance plan, you may feel like you’re swimming through a bowl of alphabet soup. There are acronyms everywhere, and it can be difficult to sort out what each health plan type means. You may have heard some of them before, but putting them into practice can be confusing. Our list of need-to-know acronyms can make a search for health insurance easier, and make the jargon sound much more like English.

PCP

PCP is an important acronym to understand prior to learning about any specific health plan. Health plans may require members to select a general practitioner, also called a Primary Care Provider, who will manage all care. A PCP is the doctor that members see for preventative care, physicals, regular checkups as well as care for illnesses prior to seeing potentially necessary specialists.

HMO

Many of the plans that you’ve been looking at on your search for insurance may be marked “HMO”. It stands for “Health Maintenance Organization”, which means that HMO members are more limited on the doctors that they are able to see. If you have an HMO, you have to choose a primary care provider who will direct your care. HMOs are more restrictive than other types of insurance because members can only see doctors who are in their HMO networks, and they have to have referrals to all specialists. That’s how the primary care provider becomes the captain of the ship, in essence. An HMO will not cover care that is not directly referred by the primary care provider.

HMOs cost less than many other plans because they are restrictive. The plan will be less responsible to pay for unnecessary care because there is a PCP who is overseeing everything.

PPO

A Preferred Provider Organization, or PPO, is another kind of health insurance network that allows members to see specialists without referrals from a PCP, but members may have different out-of-pocket costs depending on the doctors that they see. The network is less restrictive than an HMO, but it’s called a “preferred provider organization” because there are doctors who are considered in-network and preferred, and there are doctors who are out-of-network and, therefore, not preferred. This is not a reflection of the skill of the provider, but rather the state of the network that the patient is part of.

Choosing in-network providers means that there is likely to be a lower out-of-pocket responsibility for the member when seeing those providers. They can still opt to see out-of-network providers and pay the difference or deductible to do so.

EPO

An EPO is like a combination PPO and HMO plan. The Exclusive Provider Organization has a restrictive network like an HMO, and members only have access to benefits if they see a doctor within that network, but, as with a PPO, they don’t need referrals in order to see providers. Patients are not required to select a PCP to direct their care, but it is always advisable to do so.

Don’t get lost in the jumble of acronyms when you’re picking your coverage. If you understand what these few mean, you’re much farther on the way to making the right decision for you about your health insurance coverage.

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