HDHP vs PPO
Business Health Trust teams up with Kaiser Permanente and Premera Blue Cross which are two of the most respected health insurance companies in Washington. Both Premera and Kaiser offer HDHPs and both of these insurers offer PPO insurance plans.
Health insurance coverage can be confusing no matter who you are. Regulations and requirements change every year. For example, HDHP vs. PPO, what’s the difference between the two health insurance terms? Both the HDHP and PPO are medical care coverage plans. Additionally, these can occur in the same plan. Keep reading to learn more about the HDHP and PPO and what they mean for you and your employees’ health insurance.
An HDHP is a high-deductible health plan. It has much lower premiums than a non-HDHP, which makes it attractive to individuals. However, the low price comes with a higher deductible. For example, you may have to pay $3,000 or more for family coverage before what you’re paying for out of your paycheck activates. The deductible is considered part of the employee’s contributions. Sometimes employers pay a portion of the deductible for each employee. The amount varies depending on the coverage, deductible amount, and if it’s a family or individual plan.
PPO is an acronym for preferred provider network. These plans have a group of doctors, specialists, and facilities with contracts with the insurance carrier. People with a PPO can go to any provider in the group without a referral. They still have access to out-of-network providers but pay more to continue seeing them. As mentioned, you can enroll in a PPO that’s also an HDHP. Additionally, this combination makes you eligible for a health savings account or HSA. These allow you to save money tax-free to use towards qualified medical expenses.
The benefits of an HDHP include lower premiums. Plus, your out-of-pocket expenses, such as prescriptions and co-payments, will be lower in the event you need to see a doctor or visit a hospital.
On the other hand, the benefits of a PPO include not having to get referrals from primary care providers to see a specialist and the ability to choose any provider you want without worrying about their out-of-network status. However, you will pay more to see them.
You’ll have to think about your health insurance needs when choosing between the two. For example, if you’re healthy, you can go for the lower monthly premiums of an HDHP and pay less out-of-pocket expenses. But if you or your family members experience a long-term illness, it could get costly.
The advantage of a PPO is mostly for people who may need more medical attention because of a chronic condition. This plan is your best option for easier access to specialists. But you will pay more for a PPO with or without the high deductible. HDHPs are also known as HSA-qualified plans because they let you open a health savings account.
You must follow IRS guidelines and stay within the allowable savings amount for individuals and families. However, HDHP premiums are lower than other types of health insurance plans, which might make up for the difference in out-of-pocket expenses.
The advantage of a PPO is mostly for people who may need more medical attention because of a chronic condition. This plan is your best option for easier access to specialists. But you will pay more for a PPO with or without the high deductible. Additionally, out-of-network specialists will cost more, and you have a different deductible and out-of-pocket maximum for out-of-network providers. Until you reach these amounts set by the insurance company, you’ll pay for all medical costs.
HDHPs are also known as HSA-qualified plans because they let you open a health savings account. You must follow IRS guidelines and stay within the allowable savings amount for individuals and families. However, HDHP premiums are lower than other types of health insurance plans, which might make up for the difference in out-of-pocket expenses.
HDHP and PPO expenses are similar, too. Both will cover in-network services and medications after you pay the yearly deductible. In addition, both plans cover preventive care and the most necessary prescriptions.
Significant considerations with a PPO and HDHP are emergencies. For example, if you have an EPO with an HDHP and end up in an out-of-network emergency room, you’ll be responsible for the entire charge. But if you have an HDHP and PPO, then you’ll pay more for this service, but they’ll still cover a portion of the expense.
Nonetheless, if you choose a PPO and an HDHP, then you’ll have to pay the total cost of these services until you meet your deductible.
Are you trying to decide if you want an HDHP or a PPO? As mentioned, you can have both. However, the big question is the PPO vs. EPO. You can lower your premium, deductible, and co-payments with an HDHP that’s also an EPO. But these will reduce your options for doctors, specialists, and medical facilities. Additionally, if you develop or are diagnosed with a severe condition with the HDHP and EPO, it could cause your expenses to increase significantly.
You’ll have to make decisions based on your health needs and preferences. Perhaps having a higher deductible is better for you, or maybe you want more coverage on specific services, such as doctor’s visits and prescriptions. Your needs are essential in determining the best option for yourself. You should always be prepared by shopping around for the best deal.
The first place to start is by determining the price difference between an HDHP and PPO. Next, consider your and your family’s medical needs. If you have few needs, go with the HDHP. However, if you visit a doctor’s office regularly, see specialists, and take several medications, a PPO without a high-deductible might be the better choice.
Washington companies with two or more enrolled employees are eligible to participate in the Business Health Trust benefit program. Participation requires membership with the Seattle Metropolitan Chamber of Commerce or one of our partner organizations: Bellingham Regional Chamber of Commerce, Economic Alliance Snohomish County, Tacoma-Pierce County Chamber of Commerce, Thurston County Chamber of Commerce, Greater Yakima Chamber of Commerce and Archbright. Your membership in any of the above organizations automatically qualifies you for one of our 13 industry group memberships (at no additional cost), and all the advocacy, resources and savings that go along with it.