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Young female doctor discusses health concerns with patient during appointment and types of health insurance plans

Source: Courtney Hale / Getty

If you’ve been fortunate enough to enjoy mostly good health and/or have someone else pay for your health insurance, you might have never given much thought to the many types of health insurance plans out there. However, as you get older, or as health conditions pop up, all of those seemingly mysterious terms like HMO and PPO suddenly have a lot more meaning in your life. Not all types of health insurance are made equal. Some cost much more than others, but the benefits associated with them far outweigh the higher price. Others might be affordable but not offer much flexibility or control, and for those with good health on a tight budget, those are appropriate for now.

At different times and phases in your life, you might need different types of health insurance. Understanding each kind can help ensure you have access to the care you need, and at a cost that works with your financial planning. Here is a breakdown of the different types of health insurance, so you can make an informed decision about your healthcare.


Health Maintenance Organization (HMO)

Female doctor writing in file while talking with patient in clinic

Source: Beau Lark / Getty

An HMO is going to be one of the most affordable health insurance pans. It is going to have low monthly premiums, low deductibles and fixed copays. So what could possibly be the catch? In order to enjoy the low cost of this plan, you’ll need to stick within its network of local doctors and hospitals.

Additionally, once you are assigned a primary care physician (PCP), they will need to give you referrals any time you’d like to see a specialist.

Pros: Low premiums, deductibles and copays.

Cons: Less choice when it comes to providers. You’ll need PCP referral for specialists.

Who is it good for? An HMO might be the right plan for someone who is in good health, facing little or no chronic issues that require frequent visits to specialists, and someone who is trying to save money.

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