Lowering Out-O-Pocket Healthcare Costs

How to choose between health plans

When employees are offered more than one medical plan, many considerations must be taken in order to select the best option. Insurance can be complicated so it’s important to take the time to learn common insurance terms.

Types of health insurance plans

The first step to understanding your options is to understand the different types of health plans. The most common types include:

Health Maintenance Organization (HMO) – limits coverage to care from a doctor working with or for the HMO. Out-of-network care is not typically covered, and referrals are required in order to see a specialist or have a procedure. This plan can have lower out-of-pocket costs when compared to others.

Preferred Provider Organization (PPO) – costs less if you use an in-network provider, but you can receive care out-of-network and without a referral for an increased cost. This plan could have higher out-of-pocket costs.

Exclusive Provider Organization (EPO) – services are only covered when you stay in the plan’s network, except in emergencies. Referrals are usually not required. This plan also has lower out-of-pocket costs.

Point of Service Plan (POS) – costs less if you use providers and hospitals in-network, and you are required to get a referral to visit a specialist.

High Deductible Health Plan (HDHP) – can be any of the plan types listed above but must follow specific rules to be considered Health Savings Account (HSA) eligible. HDHPs often offer lower premiums and higher out-of-pocket costs, and they’re the only plans qualified to be offered with an HSA. The HSA is tax-advantaged, helping you to pay for health care costs.

Plan variables

Once you understand what types are available to you, it’s time to weigh your needs and what makes the most sense. To choose the best plan for you, consider:

  • Referrals. Would you feel inconvenienced having to obtain referrals before receiving additional care and services?
  • Health networks. Are your current providers in any of the available networks? Does that network size matter to you?
  • Costs. Compare the copays, coinsurance, deductibles, out-of-pocket maximums, out-of-pocket costs, and premiums for each plan.


Choosing the right health plan for you can be difficult, but that is why Creative Benefits, Inc. is available to assist every step of the way. If you have questions, contact our ESR Team.