2026-04-01 · personal, health, guide, comparison
Types of Health Insurance Plans Explained
Key Takeaways
- HMO plans offer the lowest premiums but require you to stay in-network and get referrals for specialists.
- PPO plans give you the most flexibility to see any provider, but you pay higher premiums for that freedom.
- EPO plans work like HMOs without the referral requirement, though you still must use in-network providers.
- POS plans blend HMO and PPO features, requiring referrals but allowing some out-of-network care.
- HDHPs pair lower premiums with higher deductibles and let you open a tax-advantaged Health Savings Account (HSA).
Who This Is For
This guide is for anyone choosing a health insurance plan, whether you are shopping on the marketplace, comparing employer options, or switching plans during open enrollment. If you are not sure what the abbreviations mean or which plan type fits your situation, start here.
HMO (Health Maintenance Organization)
HMO plans require you to choose a primary care physician (PCP) from the plan’s network. Your PCP coordinates your care and provides referrals when you need to see a specialist. Without a referral, the plan generally will not cover the visit.
How the network works: You must use in-network doctors and hospitals for all non-emergency care. If you go out of network without authorization, you pay the full cost.
Cost structure: HMOs typically have the lowest monthly premiums and predictable copays for office visits. Out-of-pocket costs stay low as long as you stay in-network.
Best for: People who are comfortable seeing in-network providers, do not need frequent specialist visits, and want lower monthly costs.
PPO (Preferred Provider Organization)
PPO plans let you see any doctor or specialist without a referral. You save money by using in-network providers, but you still get partial coverage when you go out of network.
How the network works: In-network providers are covered at the highest level. Out-of-network providers are covered at a lower rate, and you pay the difference between the provider’s charge and what the plan reimburses.
Cost structure: PPOs carry higher monthly premiums than HMOs. You may also face higher deductibles. However, you have more freedom to choose providers and do not need referrals.
Best for: People who want flexibility, travel frequently, see multiple specialists, or live in areas where network options are limited.
EPO (Exclusive Provider Organization)
EPO plans sit between HMOs and PPOs. Like an HMO, you must use in-network providers (except in emergencies). Like a PPO, you typically do not need a referral to see a specialist.
How the network works: Coverage is limited to the plan’s network. Out-of-network care is not covered unless it is an emergency. There is no partial reimbursement for out-of-network visits as there is with a PPO.
Cost structure: Premiums are generally lower than PPO plans and comparable to or slightly higher than HMO plans. The trade-off is no out-of-network coverage.
Best for: People who want the convenience of skipping referrals but are comfortable staying within a network.
POS (Point of Service)
POS plans combine features of HMOs and PPOs. You choose a primary care physician who manages referrals, similar to an HMO. However, you can also see out-of-network providers at a higher cost, similar to a PPO.
How the network works: In-network care with a referral is covered at the highest level. Out-of-network care is partially covered but at significantly higher cost-sharing. Without a referral, out-of-network claims may be denied entirely.
Cost structure: Premiums fall between HMO and PPO levels. Out-of-pocket costs depend heavily on whether you stay in-network and get proper referrals.
Best for: People who want a PCP to coordinate their care but also want the option to see out-of-network specialists occasionally.
HDHP (High Deductible Health Plan)
HDHPs have lower monthly premiums in exchange for a higher annual deductible. The key benefit is eligibility for a Health Savings Account (HSA), which lets you save pre-tax dollars for medical expenses.
How the deductible works: For 2025, the IRS defines an HDHP as a plan with a deductible of at least $1,650 for an individual or $3,300 for a family. You pay all non-preventive care costs out of pocket until you meet the deductible.
HSA advantage: HSA contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. Unlike FSAs, HSA funds roll over year to year and belong to you even if you change jobs or plans.
Cost structure: Lowest premiums of any plan type. However, you absorb more cost before insurance kicks in. Preventive care (annual checkups, screenings, immunizations) is covered at no cost even before you meet the deductible.
Best for: Generally healthy people with low expected medical costs, higher earners who want the tax benefits of an HSA, or anyone willing to trade lower premiums for higher out-of-pocket risk.
Plan Type Comparison
| Feature | HMO | PPO | EPO | POS | HDHP |
|---|---|---|---|---|---|
| Network flexibility | In-network only | In- and out-of-network | In-network only | In- and out-of-network | Varies (can be HMO, PPO, or EPO structure) |
| Referral required | Yes | No | No | Yes | Depends on underlying plan type |
| Out-of-network coverage | Emergencies only | Yes, at higher cost | Emergencies only | Yes, at higher cost | Depends on underlying plan type |
| Typical premium level | Low | High | Medium | Medium | Lowest |
| Best for | Budget-conscious, low utilization | Flexibility seekers, frequent specialists | No-referral convenience, network-comfortable | Coordinated care with some flexibility | Healthy individuals, HSA savers |
How to Choose the Right Plan
Selecting a plan type depends on your health needs, budget, and preferences. Consider these factors:
How often do you see doctors? If you rarely visit beyond an annual checkup, an HDHP with an HSA can save you money. If you have ongoing conditions requiring regular visits, an HMO or PPO may be more cost-effective despite higher premiums.
Do you need specialist access? If you see specialists regularly, a PPO or EPO removes the referral step. If you prefer a doctor to coordinate your care, an HMO or POS works well.
What is your budget? Compare total annual cost, not just the monthly premium. Multiply your monthly premium by 12, then add your expected out-of-pocket costs based on your typical medical usage. A low-premium HDHP can cost more overall than a higher-premium PPO if you have significant medical needs.
Do you want an HSA? Only HDHPs qualify. If building a tax-advantaged medical savings fund is important to you, this narrows your choice.
Are your doctors in-network? Before choosing any plan, verify that your preferred doctors, hospitals, and pharmacies are in the plan’s network. The best plan type on paper means little if your providers are not covered.
For help comparing specific plans, see our guide on how to compare insurance quotes.
Frequently Asked Questions
What is the cheapest type of health insurance plan? HDHPs have the lowest monthly premiums. However, “cheapest” depends on your total costs for the year, including what you pay out of pocket. If you use a lot of medical services, an HMO with higher premiums but lower copays may cost less overall.
Can I see any doctor with a PPO? You can see any doctor, but you pay less when you use in-network providers. Out-of-network visits are partially covered, though your share of the cost will be higher. Always check what your plan pays for out-of-network care before scheduling.
What is an HSA and who can open one? A Health Savings Account (HSA) is a tax-advantaged account for medical expenses. You can open one only if you are enrolled in a qualifying HDHP. Contributions reduce your taxable income, the balance grows tax-free, and withdrawals for qualified medical expenses are tax-free.
Can I switch plan types during the year? Generally, you can only switch plans during open enrollment or if you qualify for a special enrollment period. Check your employer’s enrollment rules or the marketplace calendar for specific dates.
Next Steps
- Review plan options through your employer or the Health Insurance Marketplace.
- Check whether your doctors and prescriptions are covered by plans you are considering.
- Use our health insurance enrollment guide for step-by-step signup instructions.
- Read the insurance terms glossary if any terms in this guide are unfamiliar.
- Learn about deductibles to better understand HDHP cost-sharing.