When the time comes to choose the health care benefits that are best for you and your family, you’ll undoubtedly be presented with a multitude of options. We all hope, of course, that we’ll be able to avoid extra trips to the doctor’s office, but when that unforeseen injury or illness strikes, it’s important to have the right coverage in place to protect your pocketbook. To help you get started, it’s a good idea to know the difference between a Preferred Provider Organization (PPO) and a Consumer-Driven Health Plan (CDHP).
While certain details will vary depending on the particular provider and plan that you have, every PPO works generally the same way – when you have a medical appointment, you’ll be charged a copay. By choosing a provider that is in-network, you’ll receive a better rate because these providers have an agreement with the insurance company to provide care at a certain price. Some PPO plans won’t provide coverage if you go to an out-of-network provider, while others will allow it if you’re willing to pay more out-of-pocket. The monthly premium for a PPO tends to be higher than other plan types, but the deductible and out-of-pocket maximum are lower. If you anticipate having a significant amount of medical expenses, the PPO could be your best choice.
The main difference between a CDHP and a PPO is that there are no copays with a CDHP. Instead, you’re responsible for all medical expenses until you reach your deductible. An exception to this rule may be certain preventive care visits such an annual wellness exam, which most plans cover at no cost to you. The monthly premium for a CDHP is typically lower than with a PPO, but the deductible is higher, making this a good option for someone who is healthy and doesn’t expect to have many medical expenses. Plus, you might have the opportunity to open a Health Savings Account (HSA) that would allow you to put away pre-tax dollars that can be used for any qualified medical expenses down the road.
No matter which health insurance plan you select, be sure to take advantage of your carrier’s resources (both online and over the phone) that are available to help you find in-network providers for the services you need.