Know all your choices before you pick an insurance policy.

Health Insurance is a critical part of your financial plan, and luckily, there are lots of different ways to buy health insurance—each option has its own advantages and disadvantages. This list of questions will help you learn more about the insurance options you’d be interested in so you can move forward to plan, shop, and get covered.

1. What types of health insurance are there?

This is the first and foremost question you should ask yourself when deciding on a plan. And the answer really depends on how involved you want to be in choosing your healthcare provider.

If you would prefer to choose from a predetermined list of healthcare professionals that participate in an insurance plan, then it’s likely you’ll want to stick with either a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO) plan.

• Health Maintenance Organization (HMO): An HMO is a plan that relies on a network of healthcare providers and facilities to deliver health services to their plan participants. With this plan, there’s limited freedom for you to choose a specific health care provider. When you do choose a primary care doctor, they’re generally going to need to follow a tight referral program before you can be seen by another specialist. The good thing is that there is less paperwork with this plan compared to others—Almost everything is predetermined. Note: If you do happen to see a doctor that’s not within the scope of your plan, it’s likely you’ll have to pay the full bill with no help from your insurance.
• Preferred Provider Organization (PPO): A PPO provides more freedom than you’d find in an HMO by allowing you to choose health care providers. But it’s likely you’ll pay more since this plan is still formed around in-network and out-of-network providers—meaning when you get treated by an out-of-network provider, you’ll pay the full cost and then submit a claim to request the PPO plan to refund you the cost. Out-of-pocket expenses are higher with this plan and more paperwork may be required depending if you choose to see out-of-network doctors.