Your network is the group of doctors, hospitals, clinics and other health care providers that your insurance plan coordinates with to provide care. If your provider is not on that list, that's considered out-of-network care.
You're not required to use providers in your network, but your health plan may not offer as much coverage when you go out of network. In that case, you'd be responsible for covering the gap between the total cost of care and what your plan covers.
7. Preferred provider organization (PPO)
Your health plan can offer different network types. One of the most popular is a preferred provider organization, or PPO.
With a PPO, your monthly premiums and out-of-pocket costs may be higher. But you have the advantage of being able to visit doctors both in and out of network without a referral.
You also don't have to choose a primary care physician, who would normally act as your first point of contact when you need care. A PPO network gives you maximum flexibility in choosing health care providers.
8. Health maintenance organization (HMO)
A health maintenance organization (HMO) is another type of network structure.
With an HMO health plan, you're required to choose a primary care physician. If you need to see a specialist, you have to see your primary care doctor first so they can make a referral.
HMO plans don't offer any out-of-network coverage unless you have a health emergency. The upside is that these plans tend to have lower premiums than PPO plans, and your overall out-of-pocket cost may also be lower.
9. High deductible health plan
High-deductible health plans carry higher deductibles than traditional health insurance. But you get the advantage of having a lower premium.
You'll need to be enrolled in a high-deductible health plan to contribute to a health savings account (HSA).
10. Health savings account
Health savings accounts are tax-advantaged accounts that are used to cover health-care expenses.
You can add money to an HSA each year, up to the annual limit for your coverage type. Contribution limits are higher for family coverage; employers can also make contributions to your plan.
An HSA offers three main tax advantages:
- Tax-deductible or pretax (through payroll deduction) contributions
- Tax-deferred growth
- Tax-free withdrawals for qualified medical expenses
If you withdraw money from an HSA for something other than a health care expense before age 65, you'll pay a 20% tax penalty, plus ordinary income tax on the money. After age 65, the 20% penalty goes away, but you'll still pay income tax on non-health care withdrawals.
Unlike a flexible spending account (FSA), which can also be used to save for health care expenses, you can roll your HSA over from year to year. As long as you stay healthy, your HSA contributions can keep growing until you need them.