Understanding Medical Plan Types:
PPO and HDHP
Both give more options for doctors than an HMO. PPOs cost more per month, but have a lower deductible. HDHPs have lower monthly costs, but higher deductibles.
When choosing a medical plan, the various acronyms can be confusing. A PPO, or Preferred Provider Organization, is a plan that generally has higher monthly costs, but doesn’t require you to go to a primary care doctor before visiting a specialist. An HDHP, or high-deductible health plan, allows you to have more control over your healthcare costs. Like a PPO, you aren’t required to see a primary care doctor, and they generally cost less per month. However, you must cover the costs of medical expenses until you meet your deductible. HDHPs are often attached to a Health Savings Account that allows you to set aside pre-tax dollars for out-of-pocket health expenses, which helps to cover the cost of a high deductible.
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