Every year, Americans have a limited timeframe to select a health care plan for the year ahead.
This year, open enrollment for 2021 coverage through the Affordable Care Act will start on Nov. 1 and run through Dec. 15 (although some states, including California and Colorado, have permanently extended their open enrollment periods).
Obtaining health insurance is likely to be a priority for most Americans this year, given the coronavirus pandemic. But figuring out the right plan for you can be tricky -- even for the experts.
Here's how to decide between two of the most popular types of plans, a health maintenance organization (HMOs) or a preferred provider organization (PPO).
Health maintenance organizations (HMOs): HMOs offer an entire network of doctors, hospitals and other health care providers who have agreed to accept payment at a certain level for services provided.
Individuals who select this plan must select from a network of local health providers. That doctor is who they will see when they need medical care. If that individual needs to see a specialist, they would first visit their primary care doctor for a referral, which means an extra office visit. The trade-off is that HMO plans tend to have lower premiums, as well as cheaper copays and coinsurance. Typically, this plan does not cover out-of-network care, except in case of emergency.
Preferred provider organizations (PPOs)A type of plan where individuals pay less if they use providers in the plan's network. You do not need referrals to see a specialist. If you see an in-network provider, you will only be responsible for a portion of the bill, depending on your plan's payment structure.
If you see a doctor who is out-of-network, you'll be on the hook for a larger portion of the bill, although most plans still cover a portion of the bill. Unlike an HMO, a PPO offers individuals more freedom in when and where they seek health care. But it comes at a higher cost -- plans typically include more expensive out-of-pocket costs, higher monthly premiums and pricier copays. There's also an annual deductible.
Unless you see a lot of specialists, a PPO plan could cost you more money over the course of a year.