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Health Insurance Plan Types

A health plan is a general term that refers to a benefit package offered by an insurer or an employer plan. Let’s review the different types of health plans like HMO, PPO, and CDHP.

What Is an HMO

An HMO is a type of health plan that often has lower monthly premiums and out-of-pocket costs, like copayments and deductibles. HMOs only cover health care services given by a certain group of doctors and hospitals, called a provider network. Not all HMO plans are the same. Some HMOs may have a smaller provider network and lower monthly premiums than other HMOs.

Things to Know About HMOs

  • See your primary care physician (PCP) first. Your PCP directs your health care.
  • Get a referral. Before you visit a specialist, get a referral from your PCP. Be sure the specialist is in your network. You do not need a referral from your PCP to see your in-network Woman's Principal Health Care Provider (WPHCP).
  • Stay in network. Check Provider Finder® to make sure your doctors, specialists and hospitals are in your plan's network to avoid paying out-of-network costs.
  • In an emergency — when your injury or illness is serious or life-threatening go to the nearest emergency room. You don't need a referral.

About Your Primary Care Physician (PCP)

When you first sign up for an HMO, you choose, or are assigned, a primary care physician (PCP) and a medical group/independent practice association (MG/IPA).

PCPs are doctors or medical professionals who focus on general practice, internal medicine and family practice. If you are a female member, you may have also selected a WPHCP. A pediatrician can serve as your child's PCP.

  • Find your medical group on the front of your BCBSIL member ID card or in Blue Access for MembersSM, our secure member website.
  • If you're a new patient, see your PCP as soon as possible. Tell him or her you're a new patient when you make your first appointment. This will help avoid delays when you are sick or need a referral.
  • You can change your PCP or medical group/IPA at any time, except while hospitalized or in the 2nd or 3rd trimester of pregnancy.
    • To change doctors within the same medical group: Call the medical group (MG/IPA) shown on your card and ask to change doctors. Use Provider Finder to find doctors in your medical group.
    • To change to a different medical group:
      • Online
        • Log in to Blue Access for Members
        • Select the Doctors & Hospitals tab
        • Select the Change MG link
        • Follow the instructions
      • Phone
        Call the Customer Service number on the back of your BCBSIL member ID card.

What Is a PPO

A PPO is a type of health plan that gives you the most flexibility, in most cases, but often has higher monthly premiums and out-of-pocket costs, like deductibles and coinsurance, than other plans. Like HMOs, each PPO uses a certain group of doctors, specialists and hospitals, called a provider network. Some lower-cost PPOs have smaller provider networks than other more costly PPOs and some HMOs.

Things to Know About PPOs

  • You don't need a primary care physician (PCP).
  • You don't need a referral to see a specialist.
  • You can get care from doctors, hospitals and specialists in network or out of network. But keep in mind, you'll pay more for out-of-network providers.
  • Check Provider Finder to find doctors, specialists and hospitals in your plan's network to keep your costs down.
  • You may need pre-authorization (pre-notification) from BCBSIL before you get certain tests or services. You or your doctor must call the pre-authorization number on the back of your member ID card to confirm.
  • In an emergency — when your injury or illness is serious or life-threatening go to the nearest emergency room or other similar facility, even when traveling out-of-state or abroad. You won't have to pay the higher out-of-network deductible and coinsurance.

CDHPs and the HSA Option

Consumer Directed Health Plans (CDHPs) often involves pairing a high deductible PPO plan with a tax-advantaged account, such as a Health Savings Account (HSA). An HSA is a savings account that you can use to cover a wide range of qualified medical costs.

Things to Know About CDHPs

  • You must have an HSA-qualified, high deductible health plan to open an HSA account.
  • CDHP premiums are often lower than other types of insurance coverage.
  • You don't have to choose a primary care physician (PCP) if your plan uses a PPO network.
  • You can get care from doctors, hospitals and specialists inside or outside of your plan's network. Keep in mind you'll pay more for out-of-network providers.
  • Use Provider Finder to find in-network doctors, specialists and hospitals to compare prices and manage costs.

Health Savings Account (HSA)

A Health Savings Account, also known as an HSA, is a tax-advantaged, individually-owned account that is used to pay for qualified medical expenses now and in the future (includes dental and vision).

Things to Know About HSAs

  • Pre-tax contributions*: If you are an HSA eligible individual, you — and your employer — can make tax-free contributions (up to the annual limit) to your HSA.
  • Tax-free growth: Any investment or interest earnings are tax-free.
  • Tax-free withdrawals: Withdrawals are tax-free when funds are used for qualified medical expenses.
  • Portability: Your account stays with you, even if you change jobs or health plans.
  • No "Use It or Lose It": Funds rollover year-to-year, no matter the balance.

Learn the difference between an HSA and an FSA (Flexible Spending Account).

* Health Savings Accounts (HSA) have tax and legal ramifications. Blue Cross and Blue Shield of Illinois does not provide legal or tax advice, and nothing herein should be construed as legal or tax advice. These materials, and any tax-related statements in them, are not intended or written to be used, and cannot be used or relied on, for the purpose of avoiding tax penalties. Tax-related statements, if any, may have been written in connection with the promotion or marketing of the transaction(s) or matter(s) addressed by these materials. You should seek advice based on your particular circumstances from an independent tax advisor regarding the tax consequences of specific health insurance plans or products.