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Comparing Traditional Health Insurance to a Health Savings Account

PPO, HMO, HSA, What's the Difference?

There are a handful of options for securing affordable health insurance, but depending on your personal health needs and budget, certain plans are better than others. When looking for a health insurance plan, it’s smart to know your options and the differences between plan types, so you can choose which plan is best for you or your family.

Traditional health insurance plans are often broken into the following categories –

Preferred Provider Organization (PPO) – A PPO is a plan that has agreements with a network of doctors, hospitals, and other providers who charge discounted fees for their services. As part of this network, your cost sharing typically results in lower prices than if you were to seek care outside of the network. Plans vary, but it’s common for PPOs to operate with monthly premiums, co-pays and deductibles.

Health Maintenance Organization (HMO) – An HMO generally requires individuals to choose a primary care physician from a list of providers partnered with the HMO. If you need to be referred for other services, the primary care physician will do so, but you typically can’t go outside the network. One drawback of this plan is that some HMOs only offer small networks of doctors, so you may have little say in choosing your health care provider, or you may have long wait times to see a doctor.

Point-of-Service Plan – This plan is like a combination of the two above. In a point-of-service plan, consumers generally must select a primary care physician from a qualified list, but they can seek care outside the network, or be referred to a doctor outside the network, and still maintain some coverage.

Significantly different from the plans detailed above is the Health Savings Account (HSA), perhaps the most innovative health insurance option available. HSAs offer members more control over their health benefits, while typically reducing premiums. By combining a high-deductible health plan with a tax-exempt saving account, individuals can cover their health care needs, including preventative care, wellness and even some alternative therapies. Health savings accounts are very flexible, allowing members to visit any doctor they choose. But to decrease out of pocket expenses, most provide a PPO network of doctors to choose from. This gives the consumer maximum flexibility to receive the care they need, when they need it, all while controlling short term costs and saving money for the future.

Choosing an affordable health insurance plan largely depends on the specific needs of the consumer. But whether you need an individual health insurance plan, a family health insurance plan or even something for your small business, arming yourself with knowledge about options – and then analyzing which plan’s benefits best suit your needs – will help to make the choice much easier.

Of course, if you need help sifting through the options and analyzing the results, just let us know. We’re here to help!

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