Picking a health care plan can feel like a “Choose Your Own Adventure” book. Think about it: “If you want the flexibility to choose from the widest variety of health care providers, go with a PPO.” “For a less expensive option, if you opt to consistently see your primary care physician, who can refer you to other health care providers, go with an HMO.”
For those who are new to health care plans, it’s certainly a lot to learn and consider! That’s why we’ve put together a brief guide to help make sense of all of the different plans, so that you can more easily choose the best one for you and your family. Every plan has its own benefits, it’s just a matter of deciding which is best for you at this time in your life.
What is an HMO?
HMO stands for “health maintenance organization.” When you have an HMO, you select your primary care physician (PCP) from within the network, and that person becomes your point person for managing all of your health care needs. If, for example, you injure your back and want to see a sports medicine doctor, you’d first connect with your PCP, because they will have to refer you to that specialist. That is, unless it’s an emergency, in which case you would go to the hospital or urgent care facility.
When you have an HMO, you’re limited to providers in your provider network in order to have the services covered by your insurance plan. If you opt to go outside of that network, then you’ll pay out-of-pocket for those costs. Still, one of the benefits of an HMO is that co-pays, co-insurance and monthly premiums are usually lower than they are for a PPO.
An HMO might be a good fit for you if:
- A lower health insurance rate is a priority.
- Your PCP is in-network, or you’re open to switching to a PCP who is in-network.
- You don’t mind going through the added step of asking your PCP for a referral to other health care providers.
What is a PPO?
PPO stands for “participating provider option.” When you have a PPO, it allows for more choices. Namely, you can select any health care provider and make an appointment without having to consult your PCP. You can even opt for health care providers who aren’t in your network, although you may have to pay higher costs for doing so.
Let’s apply PPO to the earlier example. If you injure your back and want to see a sports medicine doctor, you can simply make an appointment—no referral necessary. Typically, a PPO will cost more than an HMO, but for people who see a wider array of doctors and want the freedom to make appointments with ease, that added cost may be worthwhile.
A PPO might be a good fit for you if:
- You want to be able to make appointments with other health care providers of your choosing, including specialists, without relying on the referral of a PCP.
- You want the option of seeing an out-of-network provider, even if it might cost a bit more.
- You believe the added flexibility in choosing your health care providers is worth paying more for.
What is an HSA?
HSA stands for “health savings account.” This is not a type of health-care plan; rather, it’s an account that you contribute to on a pre-tax basis, and you’re able to use that money to pay particular medical expenses that aren’t covered by your insurance plan. The types of things you can pay for using an HSA include co-insurance, co-payments and deductibles, dental and vision services, prescriptions, certain over-the-counter medications and medical supplies, menstruation products and other items. The fund can be used to cover purchases for you, for your spouse and for your dependents.
To be eligible for an HSA, you must be enrolled in a qualified high-deductible plan. The Internal Revenue Service sets the maximum you can contribute to your HSA; in 2022, an individual can contribute up to $3,650, while the family limit is $7,300. The funds earn interest, tax-free, and unused funds roll over to the next year.
An HSA might be a good fit for you if:
- You want a savings account that offers triple-tax-free benefits (what you put in is tax-free, what you take out is tax-free and the interest is tax-free).
- You are opting for a qualified high-deductible health care plan.
- ou don’t get sick frequently, and you don’t anticipate that your spouse or dependents will have significant health-care needs.
To learn more about the health care plans available to you through BlueCross BlueShield of Alabama, visit https://www.bcbsal.org/sales/web/individuals/plan-shop.