HMOs, available through participating employers, are a type of health plan that gives you access to certain doctors and hospitals, often called network or contracting doctors and hospitals (sometimes called “providers”).
HMO Basics: When you sign up, you select a primary care physician (PCP) from a network of doctors. Your PCP is your first point of contact for most of your basic health care needs. Women can also select an OB/GYN for obstetrical and gynecological care. If you need special tests or need to see a specialist, your PCP will give you a referral to see another doctor. Learn more from Blue Cross Blue Shield: HMO Rights and Responsibilities
The Bottom Line: HMO plans generally have lower up-front costs, or premiums, than other types of plans. HMOs usually feature copayments as well. Copayments are set amounts (usually a dollar amount or a percentage) that you pay for care. An example of a copayment is $20 for each office visit. HMO plans generally provide coverage only when you use doctors, hospitals and specialists that are in the network. If you seek care outside the network, other than in an emergency or with authorization from your HMO, your care typically will not be covered at all.
Like HMOs, PPOs often feature a network of doctors, specialists and hospitals; however, there are some key differences between the two types of plans.
PPO Basics: With a PPO insurance plan, you don’t have to choose a primary care physician. You have the option of receiving care from doctors, hospitals and specialists in the network or outside the network, and you don’t always need a referral to see a specialist.
Key Features: PPO insurance plan premiums are generally higher than HMO plans, which means you’ll have to pay more up front. When you receive care from a doctor or hospital that is in the network, your costs tend to be lower. When you receive care from a doctor or hospital outside the network your costs are likely to be higher, and you may be responsible for the difference between the amount your insurance plan pays and the provider’s billed charges. PPO insurance plans usually have a deductible. So, for example, if your PPO insurance plan has a $500 deductible, your coverage doesn’t begin until you’ve paid out-of-pocket for the first $500 of your own medical expenses. Preventive care services are not subject to the deductible.
Consumer Driven Health Plans (CDHPs) often involve pairing a high deductible PPO insurance plan with a tax-advantaged account, such as a Health Savings Account (HSA)1. For an individual to establish an HSA and contribute money to the account each year, he or she must be considered an HSA-eligible individual. Eligibility includes enrollment in an HSA-qualified high deductible health insurance plan. Learn more from Blue Cross Blue Shield – Guidance on choosing a health insurance plan: U.S. Agency for Healthcare Research and Quality (AHRQ)
Key Features: If the insurance plan uses a PPO network, you don’t have to choose a primary care physician You have the option of receiving care from doctors, hospitals and specialists in the network or outside the network, and you don’t always need a referral to see a specialist.
The Bottom Line: When a CDHP includes a high deductible health insurance plan, premiums are often lower than other types of health plans because you are responsible for a greater share of your health care costs.
HSAs are type of savings account that allows you set aside money on a pre-tax basis to pay for qualified medical expenses. The untaxed dollars in a Health Savings Account (HSA) can be used to pay for deductibles, copayments, coinsurance, and some other expenses, however, generally may not be used to pay health insurance premiums.
When you view plans in the Marketplace, you can see if they’re “HSA-eligible.”
The HSA contribution limits for 2022 are $3,650 for self-only coverage and $7,300 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
The HSA contribution limits for 2023 are $3,850 for self-only coverage and $7,750 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.
HSA funds roll over year to year if you don’t spend them. An HSA may earn interest or other earnings, which are not taxable.