Do you know what those plan names really mean? Let's take a look at the highlights, so you can get the most out of the health plan you choose.
HMO (Health Maintenance Organization)
With this health plan, you choose a primary care doctor from your plan's network. He or she directs your medical care. And gives you referrals when you need to see a specialist, like a dermatologist. With an HMO, you must go for medical care within your plan's network — or you won't be covered (except for emergencies). You normally pay a copay at the time of service. This is a fixed dollar amount, like $25.
Why you might like an HMO: You work with a doctor who knows your health best. And you can predict your costs.
PPO (Preferred Provider Organization)
With this health plan, you can visit any doctor — in the network or out. You don't need referrals. And you don't have to pick a primary doctor — though you may want to. When it comes to costs, a PPO is unlike an HMO. You usually don't pay a fixed amount. You usually pay a percentage, called coinsurance. For example, you pay 20 percent and your health plan pays 80 percent. If you go out of network for care, you will likely pay more.
Why you might like a PPO: You want the flexibility to visit any doctor you choose. Without any referrals, ever.
HRA (Health Reimbursement Arrangement)
This is a fund that works with a health plan, like an HMO or PPO. Your employer sets up and pays into the fund. Then, you can use it to pay for deductibles, copays and many other health care costs you'd normally pay out of pocket. The fund rolls over from year to year, as long as you remain in the plan. But if you change plans or leave your company, you can't take the fund with you.
Why you might like an HRA: You can use employer funds to pay less out of pocket. And most or all your of your preventive care is covered.
HSA (Health Savings Account)
This is an account paired with a with a high-deductible health plan. The premium you pay is usually lower than with other plans. You put money that has not been taxed into this account. (Your employer can pay into the account, too.) Then, use the account to pay for eligible health costs today — or save it for health costs later. Your money builds interest. And since an HSA is yours to keep, you take it with you if you change jobs or health plans.
Why you might like an HSA: You pay no taxes on money you put into the account. Or on money you use to pay for qualified health care costs. Best of all, you can let the account grow year after year — and it goes where you do.
So, before you sign up for a health plan this year, look at all your options. And make a choice based on what works best for you.