Medical Plans Part Two: PPO or High Deductible Health Plan?

In the last blog post- we looked at common terms associated with health plans- and how to make better of it all.  Ideally, this would be the end of confusion, and a clear path towards choosing the perfect health plan would have presented itself.  However, one must understand the type of plan as well.  In this blog post, we’ll take a look at two common plans and the primary differences.

While a host of healthcare plan options exist, the two most commonly utilized by employers are Preferred Provider Organization Plans (PPO’s) and High Deductible Health Plans (HDHP’s).  Both plans share the same medical network, and often have the same or similar co-insurance and out of pocket maximums.  At first glance, the two plans may seem nearly identical.  So, what is the difference?

The first primary difference will be found in the monthly premiums.  PPO’s will have a higher premium than a HDHP.  While many factors exist when comparing premiums, one might see as much as a $100 to $200 difference between the rates of the PPO and HDHP.  So why not simply choose the HDHP and have a considerably lower monthly premium?

This is where one should look at the second and other primary difference.  As one would imagine from the term itself, HDHP’s will come with a significantly higher premium meaning that when you do seek medical attention, you will be required to pay for that service in full before your insurance kicks in.

If you’re seeking the easiest way to determine which plan is best for you, it might be wise to simply add up a years’ worth of premiums under each plan and determine if paying the higher cost of the PPO plan outstrips the amount you would put into meeting your deductible.

Furthermore, consider the following;

  • Are you healthy?  Consider the HDHP - If you rarely see the doctor, embrace the low rates.  Just know that if you go to the doctor, you will pay in full for the visit (no co-pay).
  • Do you have expensive medication? Consider PPO - – Medication may vary between plans, and you may see a co-pay for medications under a PPO, where-as you’ll need to meet a deductible with an HDHP.
  • Do you have access to a Health Savings Account? Consider the HDHP – Typically those with HDHP will want to combine it with a Health Savings Account.  This is a big topic so do your research and stay tuned for future posts about this very topic!
  • Any upcoming procedures? Consider the cost and compare it to the HDHP deductible. – Talk to your doctor and insurance provider about the procedure, and how the cost will change based on the different types of plans.

Choosing the proper healthcare plan for you can be a difficult process, and unfortunately the choice can be a difficult one to make, especially when considering each member of your family.  In future posts, we’ll discuss other products and how they can feel the gaps that get missed by even the best PPO or HDHP.

Need help choosing a medical plan?  Ataraxis is here to help you out.  Simply email your questions to solutions@ataraxispeo.com or call and ask to speak with the Benefits Specialist.