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What are the Differences Between HMO, HSA and PPO?

June 17, 2014

With the new health care reform, many Americans are looking into obtaining health insurance for the first time. At first glance, terms such as "Catastrophic", "HMO", "HSA", and "PPO" can be quite overwhelming if you are not familiar with them. A health plan is a broad term referring to a specific benefit packages offered by an insurer, HMP or PPO.

With an HMO plan, you are able to choose one primary care doctor. All health care services go through that specific doctor. This means your doctor will need to refer you to a specialist if he / she sees that it is necessary. Doctor visits with health care providers outside of your network may not be covered by insurance. For example, if you are experiencing digestive issues and your primary care provider is not able to help you, he / she may give you a referral to a gastroenterologist. If you are experiencing a life-threatening emergency, there is no need for a referral – go to the nearest emergency room.

A PPO is a health plan that is a little more flexible with primary care providers. However, you will more than likely pay a higher monthly premium and out-of-pocket costs such as deductibles and coinsurance. With a PPO, you are not required to see an in-network doctor and you do not need a referral to see a specialist.

A HSA is a health savings account that combines high deductible health insurance with a tax-favored savings account. The money you store in the savings account will help pay the deductible. When the deductible is met, the insurance will start paying. Money left over in the account earns interest is yours to keep.

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