HMO, PPO, EPO or POS: Which is right for you? (Part 1)

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When you compare your options on the federal marketplace, the first difference you’ll probably notice between the plans is what they cost. Health plans differ in other ways besides cost. One of the most important differences is the provider network. HMO, PPO, EPO and POS refer to types of provider networks, and understanding these can be just as important as cost when it comes to picking a health plan. Here’s a quick orientation on the health care alphabet game:

First, What’s a Provider Network?

This term refers to the group of providers (physicians, pharmacies, hospitals, therapists, etc.) whose services are covered by your health insurance plan. A larger provider network means you have more choices when it comes to choosing a primary care physician or a specialist. This can be important if you need medical care while you’re away from your home area, or if you’ve heard that a certain specialist has excellent skills but then find out they aren’t part of your provider network.

Referral Rules

Different types of networks also have different rules about whether you are allowed to contact a specialist on your own or whether your primary care doctor is the gatekeeper who decides if you need a specialist. Of course, you are free to pick up the phone and make an appointment with anyone you’d like, but a plan that requires a referral will refuse to pay a specialist if you don’t get your primary care doctor’s seal of approval first.

Definitions

Now that the basic concepts of provider networks and referrals have been explained, it’s time to take a look at some plan types. An important thing to remember about these plan types is that the differences between them are a little blurry, but we will do our best to make it a bit more simple.

  • PPO (Preferred Provider Organization): These plans usually cover some out-of-network care, although you’ll typically pay more if you see a provider who’s not in your network. You usually don’t need a referral from your regular doctor to see a specialist. About 40 percent of the plans on the federal marketplace are PPO plans.
  • HMO (Health Maintenance Organization): This type of plan generally covers only its own providers and doesn’t pay for care from any other providers outside its organization. You must also get a referral from your regular physician in order to see a specialist. HMOs account for 40 percent of Obamacare health plans.
  • POS (Point of Service): These plans pay for a certain amount of out-of-network care, but you may need a referral from your primary care provider if you want to see a specialist. This category is sometimes viewed as a blend between PPOs and HMOs, and it represents about 12 percent of Obamacare health plans.
  • EPO (Exclusive Provider Organization): Like HMOs, these plans exclude all providers that are not in your network. However, if you want to see a specialist within the network, you don’t usually need a referral from your primary care doctor. EPOs are the least common type, representing about 7 percent of Obamacare health plans in the marketplace, and some folks may confuse them with PPOs.

Two Good Questions to Ask

Don’t worry if you’re still feeling confused. Asking lots of questions will help you sort out your choices. Here are two to get you started:

  • How big is the network for this plan?
  • If I see a provider outside the network, does the amount I pay that provider count toward my deductible and out-of-pocket limit?

Our licensed brokers will be happy to help you understand your health care options and enroll in the plan that works best for you. Schedule an appointment today if you have questions.

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