Alphabet Soup: How to Make Sense of Your Health Plan Options

By Steve Dorfman

Health insurance is bewildering, even for industry professionals. The various plan types, with their three- and four-letter acronyms, swim in a thick alphabet soup: PPO, HMO, EPO, HDHP.

Don’t be intimidated; dive in. Read on for more about the various health insurance plan options available in your area.

Preferred Provider Organizations (PPOs)

Preferred provider organizations, or PPOs, offer a fair amount of flexibility. PPOs don’t hold patients to specific providers, but they do have pretty onerous requirements for out of network visits. If you do choose to see a specialist or primary care provider outside your PPO’s network, you’ll need to fill out a considerable amount of paperwork and will be subject to substantial surcharges.

On the bright side, at least you have the choice to go out of network. That’s not always a given.

Exclusive Provider Organizations (EPOs)

Exclusive provider organizations (EPOs) allow far less choice than PPOs. In fact, EPOs forbid customers from going outside their approved networks. If you do choose to “cheat” on your EPO, you’ll need to pay the full cost of whatever services you procure out of pocket. On the bright side, networks tend to be pretty broad, and premiums are quite low relative to other health insurance plan types.

Health Maintenance Organizations (HMOs)

Health maintenance organizations, or HMOs, are built around approved primary care providers who serve as gatekeepers to the rest of the healthcare experience. Though they’re streamlined and affordable, they don’t offer as much choice as other plan types, and they can be problematic for consumers who need to see multiple specialists.

Point of Service Plans (POSs)

Like HMOs, point of service plans (POSs) revolve around primary care providers who coordinate care (including referrals) for patients. They’re less restrictive than HMOs, though, and less bureaucratic for patients who choose to (or must) go out of network. That said, out of network visits aren’t cheap.

High-Deductible Health Plans (HDHPs)

These plans are ideal for relatively healthy patients and those looking to bridge temporary gaps in coverage caused by job loss or other transient circumstances. In exchange for high deductibles and other costs, they have low premiums; happily, they’re still there for you in the unhappy (and hopefully unlikely) event of a medical emergency.

 

“If you don’t visit the doctor or hospital that much, and don’t expect to, these plans could be right for you.” — Steve Dorfman

 

What About All Those Metals?

There’s another cluster in the health insurance alphabet soup. Actually, it’s more accurate to call it a sparkle. It’s the infamous “metal” categories that distinguish health insurance plans by coverage and cost.

Health insurance plans fall into four “metal” categories, to be precise. Here’s what to expect from each:

  • Platinum: Platinum plans are the most generous of the four “metals.” Though each plan is a little different, you can expect your Platinum plan to cover virtually all of your healthcare expenses — about 90%, under normal circumstances. This plan type has the highest average premium.
  • Gold: Gold plans are the second most generous of the four “metals.” They cover most healthcare expenses, typically in the 75% to 85% range. Premiums are higher than lower-priced plans, but not as dear as Platinum.
  • Silver: Next to Gold and Platinum plans, Silver plans are comparative bargains. Expect yours to pay anywhere from 65% to 75% of your healthcare expenses. Premiums are lower than Gold.
  • Bronze: Bronze plans are the most affordable and least generous of the four “metals.” Expect yours to cover about 60% of your healthcare costs, all other things being equal.

There’s also a separate, non-metal category known, appropriately enough, as “catastrophic” — as in, catastrophic health plans. As the name implies, catastrophic plans are designed for unlikely but devastating eventualities, like serious illnesses or life-threatening injuries. They’re appropriate for otherwise healthy individuals with modest budgets, though it’s important to consider their pros and cons carefully. (One often-overlooked “pro”: preventive care is usually free, despite the minuscule premiums.)

Find a Health Insurance Helper You Can Trust

It’s a tough world out there for health insurance consumers. If you’re confused about where to turn or frustrated that you’re not getting access to the health plan options you know are out there, you need a health insurance helper you can trust.

Simple Health is that helper. Unlike so many others, we’re proud to put customers front and center in everything we do. We wouldn’t be who we are without everyday healthcare consumers like you. And, as healthcare consumers ourselves we know exactly what you’re going through.

Don’t make things harder than they have to be. Work with a partner you can trust to do what’s right by you.

Steve Dorfman is the founder and current CEO of two Florida-based firms: Simple Health and Simple Insurance Leads.