What’s the difference between HMO, PPO and EPO plans?
When you’re shopping for health insurance, you have a lot of options to choose from.
Knowing the differences between plans can help you choose the one that’s right for your health care needs and budget.
As you look at plans, you may notice that some plans are HMOs, some are PPOs, and some are EPOs, but what does that mean?
HMO stands for health maintenance organization.
PPO stands for preferred provider organization.
EPO stands for exclusive provider organization.
All these plans use a network of physicians, hospitals and other health care professionals to give you the highest quality care. The difference between them is the way you interact with those networks.
With an HMO plan, you pick one primary care physician. All your health care services go through that doctor. That means that you need a referral before you can see any other health care professional, except in an emergency. Visits to health care professionals outside of your network typically aren’t covered by your insurance.
For example, if you get a skin rash, you wouldn’t go straight to a dermatologist. You would first go to your primary care physician, who‘d examine you. If your primary care physician can’t help you, he or she will give you a referral to a trusted dermatologist in your network that will.
One exception to this is that women don’t need a referral to see an obstetrician/gynecologist, or OB/GYN, in their network for routine services such as Pap tests, annual well-woman visits and obstetrical care.
Coordinating all your health care through your primary care physician means less paperwork and lower health care costs for everyone.
PPO plans give you flexibility. You don’t need a primary care physician. You can go to any health care professional you want without a referral—inside or outside of your network.
Staying inside your network means smaller copays and full coverage. If you choose to go outside your network, you'll have higher out-of-pocket costs, and not all services may be covered.
EPO plans combine the flexibility of PPO plans with the cost-savings of HMO plans. You won't need to choose a primary care physician, and you don't need referrals to see a specialist.
But you'll have a limited network of doctors and hospitals to choose from. And EPO plans don't cover care outside your network unless it's an emergency.
It's important to know who participates in your EPO plan's network. If you go to a doctor or hospital that doesn't accept your plan, you'll pay all costs.
Which one is right for me?
If you prefer to have your care coordinated through a single doctor, an HMO plan might be right for you. If you want greater flexibility or if you see a lot of specialists, a PPO plan might be what you’re looking for. And if you're interested in saving money by using a smaller network of doctors and hospitals, an EPO plan might be a good fit.