The Four Plan Types at a Glance
Most US health plans — whether offered through an employer, the Health Insurance Marketplace, or a government program — fall into one of four main structures: HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), EPO (Exclusive Provider Organization), and HDHP (High-Deductible Health Plan). Each type makes different trade-offs between monthly cost, provider flexibility, and how much care coordination is required.
Understanding these structures before comparing specific plans helps you narrow your search and ask better questions. For a broader introduction to how health insurance works, see our introductory guide to family health coverage. For plain-English definitions of cost-sharing terms, our health insurance glossary is a useful companion reference.
| HMO | Requires a designated PCP and referrals to see specialists; in-network care only |
| PPO | No PCP or referral required; covers both in-network and out-of-network care |
| EPO | No referral needed, but non-emergency care must stay in-network |
| HDHP | Lower monthly premium with a higher deductible; qualifies for a Health Savings Account (HSA) |
| Referral required | HMO only |
| Out-of-network coverage (non-emergency) | PPO only |
| HSA eligibility | HDHP only (when plan meets IRS requirements) |
| Typically lower monthly premiums | HMO or HDHP |
HMO and EPO: How Network-First Plans Work
HMOs and EPOs both limit your care to a defined provider network. Seeking care outside that network — except in a genuine emergency — typically means paying the full cost yourself. The key distinction lies in how you reach a specialist.
Under an HMO, you must designate a primary care physician (PCP) who coordinates your routine care and issues referrals when you need to see a specialist. This layered structure helps keep monthly premiums lower, but it adds a step whenever specialist care is needed. An EPO removes that requirement: you can book directly with any in-network specialist without a referral, while still staying strictly within the plan's network for non-emergency care.
If you have established relationships with specific doctors, verify they participate in a plan's network before enrolling. Provider networks are renegotiated periodically and can change from year to year.
Premium
The monthly amount you pay to maintain health insurance coverage, regardless of whether you use any medical services that month.
Deductible
The amount you pay out of pocket for covered healthcare services before your insurer begins sharing costs with you.
In-network provider
A doctor, hospital, or facility that has a contract with your health plan, typically resulting in lower cost-sharing compared to out-of-network care.
Primary Care Physician (PCP)
A doctor who serves as your main point of contact for routine care and coordinates referrals to specialists. Designation of a PCP is required under HMO plans.
Referral
A written authorization from your PCP allowing you to see a specialist. Required under HMO plans; not required under PPO or EPO plans.
Health Savings Account (HSA)
A tax-advantaged savings account available to individuals enrolled in a qualifying HDHP, used to pay for eligible medical, dental, and vision expenses.
Out-of-pocket maximum
The most you will pay in a plan year for covered in-network services. After reaching this limit, your insurer pays 100% of additional covered costs for the remainder of the year.
Cost-sharing
The portion of healthcare costs you pay yourself — including deductibles, copays, and coinsurance — rather than having the insurer cover them.
PPO and HDHP: Flexibility and Cost Trade-Offs
A PPO offers the widest provider access of the four plan types. You can see any licensed doctor — in or out of network — without a referral, though out-of-network visits carry higher cost-sharing. Families managing complex conditions, using multiple specialists, or living in areas with limited network options often find PPO flexibility worth the typically higher monthly premium.
An HDHP takes the opposite approach on cost: a lower monthly premium paired with a significantly higher deductible. You pay more out of pocket before insurance coverage fully applies, but the premium difference can free up household budget in months when healthcare needs are low. HDHPs that meet IRS eligibility requirements allow you to open a Health Savings Account (HSA) — a tax-advantaged account for qualified medical expenses. For a full explanation of how these two work together, see our guide to HSAs and high-deductible plans.
47%
Covered workers enrolled in PPO plans
According to the KFF 2023 Employer Health Benefits Survey, PPO plans are the most common plan type in employer-sponsored insurance.
29%
Covered workers enrolled in an HDHP with a savings option
The KFF 2023 Employer Health Benefits Survey found HDHP enrollment has grown substantially over the past decade of employer-sponsored coverage.
13%
Covered workers enrolled in HMO plans
According to the KFF 2023 Employer Health Benefits Survey, HMOs represent a smaller but consistent share of employer-sponsored health coverage.
Choosing a Plan Type for Your Household
No single plan type is right for every household. These questions can help you focus your search:
- How often does your family use healthcare? Frequent specialist visits may be easier to manage under a PPO's open-access model. Families with infrequent needs might benefit from an HDHP's lower premiums.
- Are your preferred providers in the plan's network? For HMOs and EPOs especially, verify this before enrolling — network lists change annually.
- Can your household absorb a high deductible mid-year? HDHPs require financial cushion to cover out-of-pocket costs before full coverage takes effect.
- How much care coordination works for your family? The HMO's coordinated model suits some households; others find the referral step inconvenient.
Once you identify a plan type that fits, review the plan's actual Summary of Benefits and Coverage document. Our guide to reading a Summary of Benefits walks through which numbers and sections matter most. If you're adding dependents, our article on how family health plan cost-sharing works explains how deductibles and out-of-pocket limits are structured differently for families.
Plan Terms Vary — Always Read Your Policy Documents
The descriptions in this article reflect how these plan types generally work in the United States, but individual plans differ. Network rules, cost-sharing structures, and referral requirements are defined in your specific plan's Summary of Benefits and Coverage (SBC) and Evidence of Coverage documents. A licensed insurance agent or benefits adviser can help you compare the actual plans available to you and clarify any terms that are unclear.
Health Insurance Glossary: 30 Terms Families Actually Encounter
A plain-English reference decoding key cost-sharing and coverage terms — deductible, copay, coinsurance, formulary, and more — that appear in every plan document.
Health Savings Accounts and High-Deductible Plans: How They Fit Together
Explains the relationship between HDHPs and HSAs, including IRS contribution rules, eligible expenses, and trade-offs families should weigh before enrolling.
HealthCare.gov Plan Comparison Tool
The federal government's official tool for comparing health plan options on the Health Insurance Marketplace, including plan type, premium, deductible, and network information.
IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans
The IRS's official publication outlining HSA eligibility requirements, annual contribution limits, and what counts as a qualified medical expense — updated each year.
This article provides general information about health plan structures in the United States and does not constitute personalized insurance, financial, or medical advice. Plan terms, network requirements, and costs vary by insurer, employer, and state. Consult a licensed insurance agent or benefits adviser when evaluating coverage options for your household.
