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What are HMO, PPO, EPO and POS health insurance plans?


Understanding provider networks


If you have health insurance or are even just shopping for coverage, you have likely come across the term “network” or “provider network.” You may have seen acronyms like HMO, PPO, EPO, or POS — but it may not be completely clear how choosing one over the other changes access to medical care and may affect out-of-pocket costs.

Which insurance is the most affordable? Which health insurance plan is right for you? For a lot of people who get their health insurance through their employer, it comes down to what options are available if there's more than one choice.

When you're considering which health plan to choose, here are some common questions you may want to ask:


What are provider networks?


A network can be made up of doctors, hospitals and other health care providers and facilities that have agreed to offer negotiated rates for services to insureds of certain medical insurance plans.


Why do health insurance companies provide access to networks?


To help keep costs down for both you, the customer using the medical insurance plan, and the insurance company itself. By negotiating rates for services, the insurance company can keep its costs down and may offer you lower out-of-pocket costs.


What are the different kinds of networks?


There are four basic kinds of networks you need to know: HMO, PPO, EPO and POS. It’s helpful to compare them in a few key categories.

Note: While we’re using common terms and definitions here, be aware that terms and definitions may vary by insurance company.


HMO, or Health Maintenance Organization

HMO plans overview

With an HMO plan, in most cases, you must see a provider, or primary care physician (PCP), within your network. Your primary caregiver acts as your gatekeeper of sorts, referring you to others within your network. (If you want to see a specialist, you may need to get a referral from your doctor.) Because this defined network can help control costs, premiums tend to be lower with an HMO, which is also commonly paired with a low (or no) deductible.


Here are more details about HMO plans:

Relationship to providers/doctors

In HMOs, providers or doctors either work for the HMO or contract for set rates as opposed to being paid per service they perform.

In-network versus out-of-network care

In most cases, if you belong to an HMO, you must use in-network care, meaning care from those health care facilities or doctors that are in the HMO’s network. Out-of-network care is allowed in emergency cases only.

Referrals and Primary Care Physicians (PCPs)

In HMOs, you will likely have to choose a PCP. This PCP is your main health care contact. Your care is often coordinated through them. You may even need to get a referral from them to see a specialist.

Preapprovals for medical services

You may need to get advanced approval before having certain medical services performed, but in an HMO, in many cases that preapproval will be handled through your PCP, if you have one. PCP stands for primary care physician (or provider). In a network, this is usually a doctor who practices internal medicine, family or general practice, or pediatrics. This PCP coordinates the majority of your medical care in the network, handling physicals, routine illnesses, preventive care and so on. Your PCP will also arrange referrals to specialists or preapprovals for certain medical services when needed.

PPO, or Preferred Provider Organization


PPO plans overview

Want to see someone in-network? Want to see someone out-of-network? No problem with a PPO plan, where you have more flexibility to see the doctors that work best for you (although you’ll likely have to pay more for the cost of care for an out-of-network provider). Premiums tend to be higher with this type of plan, which is commonly often paired with a deductible.


Here are more details about PPO plans:

Relationship to providers/doctors

Similar to an EPO, a PPO network is made up of those doctors and facilities that have negotiated lower rates on the services they perform. PPO health plans have access to those negotiated rates.

In-network versus out-of-network care

If you stay in your PPO’s network, you have access to negotiated rates on services the PPO provider has negotiated for you. You may have lower out-of-pocket costs from the PPO provider than you would out-of-network. However, PPOs differ from HMOs and EPOs by allowing you benefits for out-of-network care when you want, but possibly at a reduced level of coverage and benefits.

Referrals and Primary Care Physicians (PCPs)

Within a PPO, you are less likely to have a PCP and less likely to need a referral to see a specialist than you are in an HMO or EPO. However, PPOs do vary, so be sure to check the network requirements before you apply.

Preapprovals for medical services

Almost every network requires preapprovals for some medical services, and in a PPO, because you have more freedom to choose where to go and who to see, you may face more preapprovals. In some networks, preapprovals are required for some services or procedures. Without preapproval, that service may be covered less or not at all. Preapprovals are sometimes called prior authorizations.

EPO, or Exclusive Provider Organization

EPO plans overview

With an EPO plan, you don’t need to have a primary care physician or referral to see a specialist — you can generally see any provider if you stay in-network (streamlining the process when making appointments). On the flip side, there are no out-of-network benefits.


Here are more details about EPO plans:

Relationship to providers/doctors

Doctors and facilities that participate in an EPO are paid per service. Unlike with an HMO, they don’t directly work for or contract with the EPO carrier for a set rate. Instead, they have negotiated lower rates on services they perform for members of the EPO health plan.

In-network versus out-of-network care

Like HMOs, EPOs may restrict you to in-network care and cover out-of-network care only in emergencies.

Referrals and Primary Care Physicians (PCPs)

In an EPO as opposed to an HMO, you are less likely to be required to have a PCP or get a referral to see a specialist. Generally, you can get care from any provider if you stay in-

network.

Preapprovals for medical services

Since you often don’t have PCP when participating in an EPO, you’re more likely to have to get preapprovals before having certain health care services. A referral is when your PCP or regular physician sends you to a specialist for a specific medical issue. In many networks, referrals are required before the care is received from the specialist.

POS, or Point of Service Plan

POS plans overview

A POS plan is a combination of an HMO and PPO. Members need a referral to see a specialist and will have some coverage for out-of-network care (often with a higher copay).


Here are more details about POS plans:

Relationship to providers/doctors

In a POS network, like with a PPO, there are negotiated rates on medical services in the network for POS health plan insureds.

In-network versus out-of-network care

You must generally stay in-network for services, but may be authorized for out-of-network services in limited cases. However, just like with a PPO, if you do go out-of-network, your benefits and coverage may be less.

Referrals and Primary Care Physicians (PCPs)

As is the case in an HMO, in a POS you often must have a PCP coordinating your health care. Also, you often need referrals from your PCP to see a specialist, or in the case of POS, to go out-of-network for care.

Preapprovals for medical services

A POS is like an HMO in that some health care services will need preapproval. However, your PCP, if you have one, will often take care of that preapproval for you.


information provided by UnitedHealthcare

https://www.uhc.com/understanding-health-insurance/types-of-health-insurance/understanding-hmo-ppo-epo-pos#_=_

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