Types of Health Insurance Plans
Understanding HMO, PPO, EPO, POS, and HDHP plans—how they work, what they cost, and how they affect your access to mental health care.
Your health insurance plan type determines how you access care, which providers you can see, whether you need referrals, and how much you'll pay. Understanding your plan type is essential for navigating your mental health benefits and avoiding unexpected costs.
This guide explains the five most common plan types—HMO, PPO, EPO, POS, and HDHP—with practical examples of how each affects your ability to get therapy and what you'll pay for mental health care.
Plan Type vs Network
Your plan type (HMO, PPO, etc.) describes how the plan is structured. Your network describes which providers participate. The two work together to determine your coverage and costs.
For example, you could have an "HMO plan" using the "CareFirst Network," or a "PPO plan" using the "Aetna Choice Network." Always verify both your plan type AND whether your provider is in your specific network.
Quick Comparison: Plan Types at a Glance
Understanding the key differences between plan structures
| Feature | HMO | PPO | EPO | POS | HDHP |
|---|---|---|---|---|---|
| PCP Required | Usually Yes | Usually No | Usually No | Usually Yes | Varies by network |
| Referrals for Specialists | Usually Yes | No | No | For OON | Varies by network |
| Out-of-Network Coverage | Emergencies Only | Yes (higher cost) | Emergencies Only | Yes (higher cost) | Varies by network |
| Typical Premium | Lower | Higher | Moderate | Moderate | Lower |
| Typical Deductible | Lower | Moderate | Moderate | Moderate | Higher ($1,650+ individual) |
| Best For | Budget-conscious, local care | Flexibility seekers | Balance of cost/access | Moderate flexibility | Healthy, want HSA benefits |
HDHP Can Be Combined With Any Network Type
HDHP (High Deductible Health Plan) describes the cost structure, not the network type. An HDHP can be structured as an HMO, PPO, EPO, or POS. For example, you might have an "HDHP-PPO" or an "HDHP-HMO." The network rules depend on the underlying plan type.
Detailed Plan Type Explanations
How each plan works and what it means for your care
HMO (Health Maintenance Organization)
A plan that limits coverage to care from doctors who work for or contract with the HMO, and generally doesn't cover out-of-network care except in emergencies.
How It Works:
You enroll in a local network of providers and facilities. Insurers often pay providers a fixed amount per member (capitation) rather than fee-for-service. The plan focuses on coordinated care and prevention through your Primary Care Physician (PCP).
PCP & Referrals:
Most HMOs require you to choose a PCP who serves as your "home base" for most care. You typically need referrals from your PCP to see specialists. Many HMOs now allow direct access to in-network behavioral health providers without referrals.
Network Restrictions:
Very strict about using in-network providers. Routine care must be in-network; out-of-network visits (non-emergency) are usually not covered at all. If you choose an out-of-network therapist, you pay the full cost yourself.
Typical Cost Structure:
- • Premiums: Often lower than PPOs
- • Deductibles: May be lower or even $0 for basic services
- • Copays: Predictable copays for PCP, specialist, ER, mental health
Pros:
- • Lower premiums and often lower out-of-pocket costs
- • Coordinated care centered around your PCP
- • Good for preventive care and whole-person management
- • Predictable costs—usually know your copay amount upfront
Cons:
- • Very limited out-of-network coverage (emergencies only)
- • Need PCP coordination and referrals (can feel like extra steps)
- • If mental health networks are narrow, may be harder to find in-network therapists with openings
- • Less flexibility to see providers outside your area
Best For:
People comfortable with having a PCP gatekeeper, using a local network, and accepting less flexibility in exchange for lower costs. Those who mainly need care within one region.
How It Affects Accessing Therapy:
You'll typically have a flat copay (e.g., $30-$50 per session) for in-network therapy. Some HMOs require a PCP referral before seeing a therapist, though many now allow direct access to behavioral health. You must stay within the HMO's mental health network—if it's narrow, finding the right therapist with availability can be challenging.
HMO Therapy Example
Scenario: You have an HMO plan with a $30 specialist copay. Allowed amount for therapy: $150 per session.
- • You pay: $30 per session
- • Plan pays: $120 per session
- • 10 sessions = $300 total out-of-pocket
But: If you see an out-of-network therapist, the plan pays $0 and you pay the full $180 (therapist's fee) per session.
PPO (Preferred Provider Organization)
A health plan that contracts with providers to create a network. You pay less if you use in-network providers, but you can also use out-of-network providers at higher cost.
How It Works:
Maintains a large network of "preferred" providers who agree to discounted rates. You can go directly to any in-network specialist without a referral. You can also see out-of-network providers, but you'll face higher cost-sharing and often balance billing.
PCP & Referrals:
Most PPOs do not require you to choose a PCP. You can still have a regular primary care doctor, but the plan doesn't gate your care through them. No referrals needed for specialists, including therapists.
Network Flexibility:
In-network: Lower deductibles, copays, and coinsurance.
Out-of-network: Covered, but at higher cost with separate deductibles, higher coinsurance, and potential balance billing above the plan's allowed amount.
Typical Cost Structure:
- • Premiums: Usually higher than HMO and many EPO options
- • Deductibles: Can be moderate to high
- • Cost-sharing: Often coinsurance rather than flat copays
- • Separate in-network and out-of-network deductibles/OOP limits common
Pros:
- • Maximum flexibility to choose providers (including mental health)
- • No PCP or referral requirements
- • Out-of-network coverage means more options if you need a particular therapist
- • Good for people who travel or live in multiple locations
Cons:
- • Higher monthly premiums
- • Potential for confusing, higher out-of-network bills with balance billing
- • Care is less coordinated—you manage your own specialist referrals
- • Out-of-network costs can be significantly higher than in-network
Best For:
People who want maximum flexibility to choose providers (including mental health providers), those who travel or live in multiple locations, and those willing to pay higher premiums for that flexibility.
How It Affects Accessing Therapy:
Direct access to in-network therapists without referrals. Out-of-network coverage available if you find a therapist you really want to work with who isn't in-network—though you'll pay significantly more. PPOs often have broader mental health networks, giving you more therapist options.
PPO Therapy Example: In-Network vs Out-of-Network
In-Network Therapy:
Deductible met. Allowed amount: $150. Coinsurance: 20%.
- • You pay: 20% of $150 = $30 per session
- • Plan pays: 80% of $150 = $120 per session
- • 10 sessions = $300 total out-of-pocket
Out-of-Network Therapy:
Therapist's fee: $180. Plan's OON allowed amount: $120. OON coinsurance: 50%.
- • You pay: 50% of $120 = $60 (coinsurance)
- • Plus balance bill: $180 - $120 = $60
- • Total you pay: $120 per session
- • 10 sessions = $1,200 total out-of-pocket
EPO (Exclusive Provider Organization)
Managed care plan where services are covered only if you go to providers in the plan's network, except for emergencies. A hybrid between HMO and PPO.
How It Works:
You can usually see in-network specialists without a referral. All routine, non-emergency care must be in-network to be covered. Emergency care is covered regardless of where you are. It combines PPO-like flexibility (no referrals) with HMO-like restrictions (no out-of-network coverage).
PCP & Referrals:
Many EPOs do not require you to pick a PCP (though some employers might still encourage it). Your access to specialists usually doesn't go through a PCP—you can directly schedule with in-network providers.
Network Restrictions:
In-network only for routine care (very similar to an HMO in this respect). Networks may be large (e.g., national networks) or relatively narrow. If you choose an out-of-network therapist or doctor, you're usually paying 100% yourself.
Typical Cost Structure:
- • Premiums: Often between HMOs and PPOs
- • Deductibles: Vary; some moderate, some high
- • Cost-sharing: Often fixed copays for visits, coinsurance for hospital care
Pros:
- • No referral requirement (in many EPOs)
- • Premiums lower than many PPOs
- • Simple rule: "Stay in network" for all routine care
- • Good balance of cost savings and access (if network is adequate)
Cons:
- • No out-of-network coverage for routine care
- • If mental health networks are narrow, limits therapist choices
- • Less convenient if you move or travel frequently
- • Can't get partial coverage for out-of-network providers (unlike PPO)
Best For:
People comfortable staying within a single in-network system, those who don't want to deal with referrals, and those who want a bit more flexibility than a classic HMO but don't need PPO-level freedom.
How It Affects Accessing Therapy:
Direct access to in-network therapists without referrals (in most EPOs). Must stay within the plan's mental health network—no partial reimbursement for out-of-network therapists. Works well if the network has good therapist availability in your area.
EPO Therapy Example
Scenario: EPO plan with $40 specialist copay. Allowed amount for therapy: $150.
In-Network:
- • You pay: $40 per session
- • Plan pays: $110 per session
- • 10 sessions = $400 total out-of-pocket
Out-of-Network:
- • You pay: $180 per session (full cost)
- • Plan pays: $0
- • 10 sessions = $1,800 total out-of-pocket
POS (Point of Service)
Plans where you pay less if you use providers in the plan's network and where you must get a referral from your primary care doctor to see a specialist. Mix of HMO and PPO features.
How It Works:
POS plans combine HMO and PPO characteristics:
- • Like an HMO: You must choose a PCP and need referrals to see specialists
- • Like a PPO: You can go out-of-network, but you'll pay more
PCP & Referrals:
POS plans require you to pick a PCP. Your PCP becomes the central coordinator for all your care, including mental health referrals in some designs. Most POS plans require PCP referrals to in-network specialists and sometimes to out-of-network care if you want it covered at all.
Network Flexibility:
In-network care: Lower copays/coinsurance, similar to HMO.
Out-of-network care: Allowed, but at higher cost. Often a lower reimbursement percentage, you may have to file your own claims, and you may face balance billing.
Typical Cost Structure:
- • Premiums: Usually between HMOs and PPOs
- • Deductibles: Moderate; might be lower for in-network
- • Cost-sharing: Copays and/or coinsurance with better terms in-network
Pros:
- • More flexibility than HMO (out-of-network option exists)
- • Often lower premiums than PPO
- • PCP oversight can improve care coordination for complex needs
- • Balanced middle ground between cost and flexibility
Cons:
- • More administrative steps (referrals, possibly more paperwork)
- • Out-of-network care still costs much more than in-network
- • Can be confusing (blending HMO and PPO rules)
- • Referral requirements can delay access to specialists
Best For:
People who are okay having a PCP and referral system, those who want some out-of-network coverage just in case, and those who don't need full PPO freedom but want more options than an HMO.
How It Affects Accessing Therapy:
May require PCP referral to see a therapist (though some POS plans allow direct access to behavioral health). In-network therapy has predictable copays. Out-of-network therapy is covered but expensive—higher coinsurance and balance billing apply.
POS Therapy Example
Scenario: POS plan requires referral for in-network therapy. In-network copay: $35. OON coinsurance: 60%, allowed amount: $110.
In-Network (with referral):
- • You pay: $35 per session
- • 10 sessions = $350 total out-of-pocket
Out-of-Network (therapist charges $180):
- • Plan's allowed amount: $110
- • Your coinsurance: 60% of $110 = $66
- • Balance bill: $180 - $110 = $70
- • Total you pay: $136 per session
- • 10 sessions = $1,360 total out-of-pocket
HDHP (High Deductible Health Plan)
A plan with a higher deductible than traditional plans and usually lower monthly premiums. Can be paired with a Health Savings Account (HSA).
How It Works:
You pay most routine costs out-of-pocket until you hit the deductible. Many HDHPs still cover preventive care (like annual checkups and some screenings) at no cost before the deductible. After you meet the deductible, you pay coinsurance and the plan pays the rest, up to the out-of-pocket max.
IRS 2025 HSA-Qualified HDHP Thresholds:
- • Self-only: At least $1,650 deductible
- • Family: At least $3,300 deductible
- • Out-of-pocket limits no higher than set federal caps
Important Note:
"HDHP" describes cost structure, not network type. An HDHP can be structured as an HMO, PPO, EPO, or POS. For example, you might have an "HDHP-PPO" or "HDHP-HMO." The PCP, referral, and network rules depend on the underlying plan type.
Typical Cost Structure:
- • Premiums: Lower than comparable non-HDHP plans
- • Deductibles: High (at least IRS minimum; often much higher)
- • Cost-sharing after deductible: Typically coinsurance (e.g., 20%)
Pros:
- • Lower monthly premiums
- • Eligible for HSA (if it meets IRS rules), which provides triple tax advantages
- • Catastrophic protection once deductible/OOP max is reached
- • Incentivizes cost-conscious healthcare decisions
Cons:
- • Higher upfront costs when you do need care, including therapy
- • People may delay or skip necessary care due to cost concerns
- • Requires financial discipline to budget for healthcare expenses
- • Can be very expensive early in the year if you need frequent care
Best For:
People who are relatively healthy and rarely use care, or can afford to cover the higher deductible if something happens. Those who want to pair the plan with an HSA to get tax benefits and build long-term healthcare savings.
Important Considerations for Therapy:
Therapy is typically subject to the full deductible plus coinsurance. This means you pay the full allowed amount per session until you meet your deductible—which can be $1,650, $3,000, or even higher. If you're in weekly therapy, costs can add up quickly early in the year.
However, you can use HSA funds (pre-tax) to pay for therapy, reducing your effective cost. Some employers contribute to HSAs to help offset the high deductible.
HDHP Therapy Cost Example
Scenario: HDHP with $3,000 individual deductible, 20% coinsurance after deductible. Allowed amount for therapy: $150 per session.
Sessions 1-20 (before meeting deductible):
- • You pay: $150 per session (full allowed amount)
- • Total after 20 sessions: $3,000 (deductible met)
- • Plan pays: $0
Session 21 onward (after deductible met):
- • You pay: 20% of $150 = $30 per session
- • Plan pays: 80% of $150 = $120 per session
Total Cost for 30 Sessions (about 7 months of weekly therapy):
- • Sessions 1-20: $3,000 (deductible phase)
- • Sessions 21-30: 10 × $30 = $300 (coinsurance phase)
- • Total out-of-pocket: $3,300
Compare to a plan with $30 copay: 30 sessions = $900 total.
Health Savings Accounts (HSA) with HDHPs
Understanding the tax-advantaged savings account paired with high deductible plans
A Health Savings Account (HSA) is a tax-advantaged savings account you can use to pay for qualified medical expenses with pre-tax dollars. You must be enrolled in an HSA-qualified HDHP and have no disqualifying other coverage to contribute to an HSA.
How an HSA Works
- • You (and sometimes your employer) deposit money pre-tax into the HSA up to annual IRS limits
- • You can spend that money tax-free on qualified medical expenses: therapy visits, deductibles, copays, coinsurance, prescriptions
- • Funds roll over year to year indefinitely—you never lose them
- • You keep the HSA even if you change jobs or health plans
- • Can be invested for long-term growth (similar to a retirement account)
2025 HSA Contribution Limits
- • Self-only coverage: $4,300
- • Family coverage: $8,550
- • Age 55+ catch-up: Additional $1,000
Triple Tax Advantage
HSAs offer three tax benefits that make them unique:
- 1. Contributions are pre-tax or tax-deductible (lowers your taxable income)
- 2. Growth is tax-free (interest and investment gains aren't taxed)
- 3. Withdrawals are tax-free when used for qualified medical expenses
This makes HSAs one of the most tax-advantaged savings vehicles available—even better than 401(k)s for healthcare expenses.
Using HSA Funds for Therapy
Therapy visits, deductibles, copays, and coinsurance for mental health services are qualified medical expenses that can be paid with HSA funds tax-free. This reduces the effective cost of therapy if you're in an HDHP.
Example:
You're in the 22% tax bracket and pay $150 for a therapy session using your HSA:
- • Actual cost to you: $117 (after accounting for tax savings)
- • If you paid with after-tax money: $150
- • Savings: $33 per session (22% tax savings)
HSA vs FSA Comparison
| Feature | HSA | FSA |
|---|---|---|
| Eligibility | HSA-qualified HDHP required | Any health plan |
| 2025 Contribution Limit | $4,300 individual / $8,550 family | ~$3,200 (employer-set) |
| Rollover | Yes - funds never expire | No - use it or lose it (limited rollover) |
| Portability | Yes - you own it | No - employer owns it |
| Investment Options | Yes - can invest for growth | No - cash only |
| Tax Benefit | Triple tax advantage | Pre-tax contributions only |
For Therapy Patients: Both HSAs and FSAs can be used to pay for therapy sessions, copays, coinsurance, and deductibles tax-free. HSAs offer more flexibility and long-term benefits.
Why Some People Choose HDHP + HSA
- • Lower premiums free up money to save in HSA
- • Tax savings reduce effective cost of healthcare
- • Long-term savings vehicle for future healthcare costs (including retirement)
- • Employer contributions to HSA help offset high deductible
- • Catastrophic protection with out-of-pocket max limits downside risk
How to Identify Your Plan Type
Finding out which type of plan you have
Not sure which plan type you have? Here's how to find out:
1. Check Your Insurance Card
Look for words like HMO, PPO, EPO, POS, or HDHP near the plan name. The network name is often printed under the plan name. Some cards explicitly state "Plan Type: PPO" or similar.
2. Review Your Summary of Benefits and Coverage (SBC)
Your SBC is a standardized document that describes your plan's coverage. It often includes language like "Type of plan: HMO" or "Type of plan: PPO" in the header or first page.
3. Log Into Your Insurer's Portal
Under "My Plan," "Coverage Details," or "Benefits Summary," the portal will usually state your plan type. Look for your deductible amount—if it's $1,650+ for individual coverage, you likely have an HDHP.
4. Call Member Services
Call the number on your insurance card and ask:
- • "What type of plan do I have?"
- • "Do I need a PCP?" (Yes = likely HMO or POS)
- • "Do I need referrals to see specialists?" (Yes = likely HMO or POS)
- • "Do I have out-of-network coverage for routine care?" (Yes = likely PPO or POS; No = likely HMO or EPO)
- • "Is my plan HSA-eligible?" (Yes = HDHP)
5. Check If You Have an HSA or HRA
HSA: Usually held at a bank or financial institution in your name. If you have an HSA, you definitely have an HDHP.
HRA: Typically administered by your employer or a third-party administrator. Not "owned" by you. Can be paired with any plan type.
Common Naming Conventions
Plan names often include clues about the plan type:
- • "Blue Choice HMO" = HMO
- • "Aetna Choice POS II" = POS
- • "UnitedHealthcare Choice Plus" = Usually PPO
- • "Kaiser Permanente" = Typically HMO
- • "HealthSaver HSA" or "HDHP" in name = High Deductible Plan
However, plan names vary by region and employer, so always confirm your specific plan type.
How Plan Type Affects Mental Health Care
Understanding the practical impact on accessing therapy
Thanks to the Mental Health Parity and Addiction Equity Act (MHPAEA) and the Affordable Care Act, most plans that cover mental health must treat mental health and substance use disorder benefits no more restrictively than comparable medical/surgical benefits. However, plan type still matters significantly for day-to-day mental health access.
Network Breadth
HMO/EPO:
If the mental health provider network is narrow, you may struggle to find child specialists, trauma-informed therapists, or providers with availability for evenings or telehealth. Out-of-network options are very limited or not covered.
PPO/POS:
Greater chance of finding a therapist who fits your needs—even if out-of-network. More flexibility to see providers across broader geographic areas.
Referrals & PCP Role
HMO/POS:
Some plans require referrals from your PCP to see a psychiatrist or certain mental health specialists. This can add time and complexity for someone already in distress.
PPO/EPO:
Usually allow direct scheduling with in-network therapists without referrals. Faster access to care when you need it.
Cost Structure for Therapy
HMO/EPO/POS (non-HDHP):
Therapy often has a flat copay (e.g., $20-$50 per session) once any required deductible is met. Predictable costs.
PPO/HDHP:
Therapy may be subject to deductible + coinsurance, especially in HDHPs. For moderate or long-term therapy, this can add up quickly—potentially thousands of dollars before reaching the deductible.
Telehealth and Cross-State Access
Plan type + network shapes whether telehealth therapy is covered and if you can see providers licensed in multiple states if you travel or move. PPOs and some national EPOs often have broader telehealth networks; local HMOs may be more limited.
Behavioral Health Carve-Outs
Some plans manage mental health benefits through a separate company (a "carve-out") instead of the medical insurer on your card. Common companies include Optum, Magellan, and Carelon.
How to Tell If Your Plan Has a Carve-Out:
- • Your insurance card lists a separate phone number for "Behavioral Health"
- • When you call about therapy, you're transferred to a different company
- • Your therapist says "I'm in-network with Magellan, not [your carrier]"
What This Means:
- • Check the correct network - a therapist may be in-network for your medical plan but not the behavioral health vendor, or vice versa
- • Different prior authorization processes and appeals procedures for mental health
- • Billing issues if claims are sent to the wrong entity
Mental Health Parity Protection
Under federal parity laws, mental health benefits must generally be comparable to medical/surgical benefits in terms of:
- • Financial requirements: Deductibles, copays, coinsurance, out-of-pocket maximums
- • Quantitative treatment limits: Visit limits, day limits, dollar limits
- • Non-quantitative treatment limits: Prior authorization, medical necessity criteria, network admission standards
However, parity doesn't guarantee low costs overall or broad networks—it just ensures mental health isn't treated worse than physical health within your plan type. Learn more about mental health coverage →
Choosing the Right Plan Type
Questions to ask yourself when selecting a plan
Choosing the right plan type depends on your healthcare needs, budget, and preferences. Here are key questions to consider, especially through a mental health lens:
Do you have established providers you want to keep?
If you have a therapist you're already seeing and want to continue with, verify they're in-network before choosing a plan. PPOs offer more flexibility if you want to keep an out-of-network provider.
Do you value flexibility vs lower costs?
Lower costs, less flexibility: HMO plans offer lower premiums and copays but restrict you to in-network providers and may require referrals.
Higher costs, more flexibility: PPO plans cost more but let you see out-of-network providers and don't require referrals.
Are you generally healthy vs have ongoing care needs?
Healthy, infrequent care: An HDHP paired with an HSA may save money through lower premiums and tax advantages.
Ongoing therapy or chronic conditions: A non-HDHP plan with reasonable copays for mental health may be more affordable overall. Calculate total annual costs (premiums + expected therapy copays/coinsurance).
Do you want to save with an HSA?
If you want to take advantage of HSA tax benefits and can afford the higher deductible, an HSA-eligible HDHP may make sense— especially if your employer contributes to your HSA.
How important is ease of access without referrals?
If you want to schedule directly with specialists (including therapists) without getting PCP referrals first, choose a PPO or EPO. If you don't mind coordinating through a PCP, HMO or POS plans may offer lower costs.
Do you travel frequently or live in multiple states?
PPOs and some national EPOs offer broader geographic networks and better telehealth coverage. Local HMOs may have limited options outside your immediate area.
Calculate Total Costs, Not Just Premiums
When comparing plans, consider your total annual healthcare costs:
Formula: Annual Premium + Expected Out-of-Pocket Costs
Example for weekly therapy:
Plan A: HMO with $30 copay
- • Annual premium: $3,600
- • 50 therapy sessions × $30 = $1,500
- • Total annual cost: $5,100
Plan B: HDHP with $3,000 deductible, then 20% coinsurance
- • Annual premium: $2,400
- • First 20 sessions (deductible): $150 each = $3,000
- • Next 30 sessions (coinsurance): $30 each = $900
- • Total annual cost: $6,300
In this example, the HMO with higher premiums actually costs $1,200 less annually if you're in weekly therapy.