You may have an opportunity to enroll in one of several plans (defined below).

To help you understand the different types of coverage, we’ve provided definitions for some of the most common health insurance terms. Knowing what these terms mean can help you understand the out-of-pocket expenses for different health plans, which is helpful when choosing one plan over another.

Differences between the types of health plans

First, it’s helpful to understand the differences between the most common plan types: 

• Health maintenance organization (HMO): This type of insurance plan requires enrolled patients to receive most or all of their care from a specific group of providers (network). An HMO plan may also require your primary care provider (PCP) to make a referral before you can receive specialty care.
• High-deductible health plan: This type of insurance plan usually has a higher annual deductible than other types of health insurance, with lower monthly premiums. A higher deductible means you’ll pay for 100% of services up to a specific dollar amount before insurance coverage kicks in. A health insurance premium is the monthly amount you pay for the health insurance plan you choose.
• Preferred provider organization (PPO): This type of plan gives you greater flexibility in managing your own healthcare. This plan lets you choose doctors and hospitals both in- and out-of-network. You may be able to see any specialist within the plan’s network of doctors without a referral from your PCP. You may also be able to receive treatment from a provider outside of the PPO network at a higher fee.
• Exclusive provider organization (EPO): This is a type of managed care plan (insurance plan) and is similar to a health maintenance organization (HMO). To be covered, enrolled patients are required to receive care from the doctors, specialists or hospitals in the plan’s network (except in an emergency).

Common costs of health insurance plans

Next, it’s important to know how you and your insurance company may share costs:

• Annual deductible: This is the amount of money you’ll need to pay out of pocket for covered medical services before your insurance plan pays anything. 
• Co-insurance: This is a fee you may need to pay for covered services after you meet your annual deductible. For example, if your plan pays for 70% of a covered service, you’ll need to pay the remaining 30%.
• Co-payment (co-pay): This is the fixed fee you pay for certain types of visits, at the time of service. You may have different co-pay amounts for primary care, specialist, urgent care or emergency room visits.

Common features of health insurance plans

Finally, these are some features common to various health insurance plans. Familiarizing yourself with these terms can help you save money in the long run:

• Health savings account (HSA): This special savings account benefits people with high-deductible health plans. You can set aside pre-tax dollars to pay for certain medical expenses, including deductibles, co-pays and co-insurance.
• In-network: Each health insurance plan contracts with certain doctors, hospitals and other facilities to create a network. When you use one of these approved providers, it’s considered an in-network service.
• Noncovered services: This refers to any medical services not covered by your insurance company. If you receive noncovered services, you must pay for them out of pocket.
• Out-of-network: Any doctors, hospitals or other facilities that are not part of your health insurance company’s approved network are considered out-of-network. If you receive nonemergency care from an out-of-network provider, you may be responsible for paying some or all of the costs.
• Out-of-pocket maximum: The maximum dollar amount you’ll be required to pay out-of-pocket for covered services during a plan year. Once you reach your out-of-pocket maximum, your health insurance company pays for all covered services through the rest of the plan year.