PPO
(Preferred Provider Organization)

PPO plans are usually what most people image when they think of health insurance.
With PPO plans, you can go to any provider (doctor, hospital, lab, etc) without any referrals/permissions from your main doctor. Ideally, you’ll want to use in-network/contracted doctors to get the best deal. Most plans have a high out-of-network/non-contracted deductible making it hard to get reimbursed for seeing providers that are out-of-network.

Pros: Freedom to choose your provider, no referrals required, faster appointments

Cons: Most expensive type of plan, due diligence required to find an in-network provider, potentially higher out-of-pocket costs

Best Fit: You want the most flexibility, most freedom, faster appointments, and possibly better doctors and hospitals.

Insider Thoughts: While the best doctors in the industry aren’t usually contracted with insurance companies (except maybe Medicare), PPO plans do typically have a better selection of doctors than other plan types. Ideally, it’s always best to ask or verify if a provider is “in-network or contracted” vs. “accepted”. Some providers will state that they “accept” the PPO plan, only to have you pay upfront for the services and letting you deal with the insurance companies for a potential reimbursement (this really means that they were out-of-network), which can sometimes be a waste of time due to the high out-of-network deductible and the actual reimbursement rates are usually low. Also, some doctors are only contracted with group PPO plans, but not individual PPO plans, so it’s best to send them a copy of your ID card to have them check.

HMO
(Health Maintenance Organization)

HMO’s are perhaps the second type of plan that comes in mind to most people. With HMO plans, you can only go to providers (i.e. doctors, hospitals, labs) within your medical group. Emergency rooms and pharmacies are usually the only exceptions. HMO plans also required a PCP (Primary Care Physician) to be assigned to each family member and a referral/permission request is required if you need to see a specialist (the only exception are OB-GYN’s, no referral required).

Pros: Usually the lowest premiums, no need to check in-network statuses, potentially easy to navigate after you get used to the system. Some Platinum and Gold HMO plans have flat co-pays for most services vs. co-insurance (paying a specific percentage).

Cons: Little to no freedom in choosing your specialists. Sometimes the quality of the providers can be less than stellar, potentially long wait times to see specialists (2 months is common), typically more claim errors or denials.

Best Fit: You want to keep it simple and don’t mind giving up the freedom of choosing your own doctors (except for your PCP). You are patient and don’t need frequent doctor visits.

Insider Thoughts: While HMO plans are typically what most employees choose at work, on the private sector the opposite is usually true with the exception of Kaiser. There can be a lot of frustration trying to use the plan if you don’t pick a friendly and responsive PCP who is more open to giving referrals or a competent medical group. In my opinion, HMO plans are usually OK for basic maintenance, but not ideal for those with heavy or frequent needs or expensive tier 3 or tier 4 medications. Kaiser may have one of the best HMO systems in the nation (though personal experiences will greatly vary depending on the assigned facility). Other non-Kaiser carriers will sometimes allow you to access great medical groups such as UCLA, Cedars-Sinai, Greater Newport Physicians (Hoag), and Healthcare Partners, though often times you may have to settle for smaller, lesser known medical groups.

EPO
(Exclusive Provider Organization)

EPO are in-network only PPO plans.
You can go to any provider as long as they are in-network/contracted. If you go out-of-network, there is no coverage at all except for emergency rooms.

Pros: A little bit cheaper than PPO plans, freedom to choose any in-network provider, no referrals required, often times faster appointments

Cons: Usually the second most expensive type of plan, usually has a smaller provider network (i.e. less in-network doctors and hospitals than PPO plans)

Best Fit: You want a PPO, but want to pay a slightly lower premium, don’t plan on going out-of-network, and you are willing to always check if a provider is
in-network before making an appointment.

Insider Thoughts: EPO plans can be a hit or miss depending on the carrier’s network. Sometimes carriers offer full network EPO plans (best case scenario), but more often than not a narrow or “tailored” network is used. It is extremely critical to verify before signing up for an EPO plan that your providers are and will continue to be in-network while you have this type of plan. When in doubt, please send us a message for a no cost second opinion.

POS
(Point of Service)

Nowadays, this is a rare type of plan unless you work for a large corporation. None of the individual CA carriers sell POS plans, though some do exist in the group/employer-based market. POS are hybrid/blended HMO/PPO plans. An assigned in-network PCP (Primary Care Physician) is required, but clients also have the option of going out-of-network and get some reimbursement. Referrals are required to see specialists.

Pros: Usually cheaper than PPO plans, but more expensive than HMO plans.

Cons: Same cons are HMO plans, potentially a lot of paperwork to try to get reimbursed for out-of-network care, higher out-of-pocket costs for going out-of-network.

Best Fit: You like the HMO model, but would like the flexibility to go out-of-network and don’t mind only receiving a partial reimbursement.

Insider Thoughts: I personally don’t think that POS plans are a very good fit for most people. It can be confusing to use and the majority of people will use the plan like an HMO (might as well save a little bit of premium and go for a normal HMO). POS plans were very popular years ago, but they are on the way out.

HDHP / HSA
(High Deductible Health Plan /
Health Savings Account)

This plan is actually just a PPO or EPO plan with special tax advantages. If you have this plan, you are allowed to open an optional HSA bank account, contribute up to a certain amount every year tax-free or at least reduce your taxable gross income, and use funds to pay for qualified medical expenses (e.g. doctor visits, medications, surgeries, dental, vision, even first-aid kits). Retirement focused savers also use this as an extra retirement fund tool. Talk to your tax person to see if an HSA might be tax advantageous for you.

Pros: Triple tax benefits, same advantages of PPO and EPO plans. slightly cheaper than PPO and EPO plans.

Cons: Almost all services will be subject to a medium ($2500+) to high ($5000+) deductible which means you will be paying 100% of the insurance negotiated rates until you meet the deductible. In other words, you may be surprised at the high cost of using the plan. Also, most HSA banks will charge you a nominal monthly fee.

Best Fit: Tax savings or retirement focused people, or individuals who are always meeting their annual maximum out-of-pocket.

Insider Thoughts: HDHP/HSA are becoming less popular over time and only a small percentage of people sign up for them. If you sign up for an HSA plan, you should have a healthy cash balance to pay off medical bills. While some employers do partially fund employee HSA bank accounts (if they sign up for an HSA plan), this trend is declining.
CPA’s generally recommend this type of plan when clients have sufficient discretionary income or heavily focused on retirement funds.

Other Random Plans
(Including Common Non-Insurance Programs)

HSP (Health Service Plan) : This is unicorn (not in a good way), very few carriers offer this. This is essentially an HMO plan (PCP required), but no referrals are required to go see a specialist. You can just make an appointment and go, but the specialists must either be part of the same medical group or part of the assigned network.

HCSM (Health Care Sharing Ministry): This is actually not ACA compliant health insurance. In fact, it’s technically not even health insurance. There has been a lot of negative publicity about these plans (some states have banned specific HCSM’s in their state) due to their unwillingness to actually pay for claims and liquidity issues, but they are an effective tool to be exempt from the ACA tax penalty and it could be potentially better than nothing. Generally priced at least half the rate of a legitimate ACA compliant health plan, but not guaranteed to actually pay out.

Short-Term Health Insurance Plans: Banned in CA since 2019 due to numerous factors (pre-existing conditions exclusions and simply too much fine print). Beware of non-licensed sales people pitching their product as a short-term insurance plan, it’s probably a lie.

Supplemental Insurance: This isn’t ACA compliant health insurance. These plans typically pay you a fixed dollar amount for specific events (e.g. heart attacks, inpatient hospitalizations, annual check ups, accidents, etc), but you must read the fine print and understand the pre-existing condition clauses. These plans can help you bridge or reduce your financial responsibility that you may experience with health insurance if you go through major health events.

Network Discount Cards: Perhaps, the biggest rip-off of all. Not only is this not insurance, but you can usually negotiate the same or better discounted cash rates by just calling around doctors and hospitals. Do not buy, ever.