Chapter 3 · 7 min read

Plan Types

Plans come in four main flavors. The difference is mostly about how much freedom you have to choose providers, versus how much you pay.

HMO — cheapest, most restrictive

HMOs have the lowest premiums and out-of-pocket costs. The trade-off: you must use the in-network providers (except in emergencies), and you typically need a referral from your primary care doctor to see a specialist.

Good to know

HMOs are great if: you're healthy, you're cost-sensitive, and you don't already have a specific doctor you can't live without.

PPO — most freedom, highest cost

PPOs let you see any specialist without a referral and use out-of-network providers (at higher cost). You pay more in premiums for that freedom.

EPO — the middle ground

EPOs are like HMOs without the referral requirement. You stay in-network, but you can self-refer to specialists. Premiums sit between HMO and PPO.

HDHP — high deductible, pairs with HSA

HDHPs have lower premiums but higher deductibles. The big perk: you can open an HSA — a tax-free savings account for medical expenses that rolls over forever. For healthy young adults who don't expect much care, the HSA can be the closest thing health insurance has to a retirement account.

HMO vs PPO — the question we get most

Usually an HMO or EPO. You probably don't have a specialist you're attached to, you can find a primary care doctor in any network, and the lower premium is real money. Switch to a PPO if you travel a lot, split time between cities, or have an ongoing condition with a specific specialist.

Before enrolling, find your doctor's name in the plan's provider directory. Every insurer publishes one. If your doctor isn't in-network on the plan you want, either pick a different plan or budget for out-of-network costs.