HMO, PPO, HDHP, we hear these acronyms allthe time when we're enrolling in medical benefits. But, do you know what the difference is betweenthem? We're going to break it down for you in lessthan two minutes. Are you ready? HMO plans give you access to a network ofdoctors and hospitals and you usually pay a fixed cost for your services known as acopay. You are not able to access any out-of-networkdoctors or hospitals, they are not covered by the insurance plan. And in most cases, you choose your doctor,or a “PCP”, to manage your healthcare.
Think of this as your personal healthcareconcierge that will refer you to specialists when you need them. Now, PPO plans have a bit more flexibility. So, you're free to visit doctors and hospitalsin and outside of the network. But, just because you can be flexible, doesn'tnecessarily mean you won't spend more. Going out-of-network means more out-of-pocketcosts for you since your insurance plan will only cover a certain percentage of certainservices. Instead of paying copays for most services,you're more likely to see a coinsurance when searching for a price.
Coinsurance means the percentage of the costyou're responsible for paying. So, the pay structure generally works likethis..let's say you break your leg, you pay your deductible and after that you only paya certain percentage of your services – the coinsurance. So, when thinking about medical costs, youmust look at everything, including that deductible. Now, HDHP stand for high deductible healthplan. Which means just that, you have a high deductible. Why? Well, it will help you gain a better understandingof your healthcare costs.
The HDHP plan could have the characteristicsof an HMO plan or a PPO plan. But what really sets this plan apart, is thatit qualifies you to open a health savings account to go with it. HSAs are essentially bank accounts that youfund directly from your paycheck. The money comes out of your paycheck tax-free,and you get to use those funds to help you pay for that high deductible or other healthcare expenses. And, since you have a higher deductible, yourmonthly premiums tend to be lower. Well, there you have it, those are the coredifferences between and HMO, PPO and HDHP medical plan.
And now when you're enrolling in your medicalbenefits, you can feel more confident and informed in what you're looking for. No plan is necessarily better than the other,it all boils down to what works best for you and your family. Video brought to you by brand28!