A Guide to the Differences Between an HMO, PPO and EPO Plan

HMO, PPO and EPO Insurance Plans: What's the Difference?

Choosing an insurance plan can be difficult, especially if you don't understand the differences between them. This guide will teach you everything you need to know about HMO, PPO and EPO plans, allowing you to make an informed decision about which individual health insurance plan best fits your needs.

Health Maintenance Organization (HMO)

An HMO plan is one of the most affordable types of health insurance, making it a great option if you're on a tight budget. In this plan, you'll be required to choose doctors within the network. Once you pick a primary care physician, who you'll see for regular checkups, he or she will provide you with referrals to see other specialists, such as a dermatologist or cardiologist. Your primary care physician will also handle routine illnesses and preventative care.

Because your primary care physician is responsible for coordinating your care, it's imperative that you choose one you trust. If you do choose to see a doctor outside of the HMO network or without a referral, you'll probably have to pay out of pocket unless it's a medical emergency. Therefore, the HMO plan is a good choice if you don't have many serious medical issues. Because the HMO network can help control costs, the premiums and deductibles are generally lower than PPO and EPO plans. 

Take Andrew, for example. Because he's trying to pay off his student loans, he chooses an HMO plan because it'll allow him to keep his expenses down and pay off his debt much quicker. Andrew doesn't have any serious health problems, making him a great candidate for an HMO plan. His main doctor is his primary care physician, and he'll be able to see in-network specialists through his doctor's referrals.

Preferred Provider Organization (PPO)

Often known as the plan with the most freedom, a PPO usually has higher premiums and deductibles than an HMO or EPO. However, this plan gives you the flexibility to see specialists and doctors outside of the network without having to ask for a referral from your primary care physician. In fact, some PPO plans don't require you to have a primary care physician at all. You have the freedom to go to any healthcare professional you want, regardless of whether they're inside or outside of the network.

If you do choose to stay in your PPO's network, however, you can gain access to negotiated rates on services. The copays and coinsurance for in-network doctors are more affordable than those outside of the network. A PPO plan is a great option if you're willing to pay a higher monthly premium to have more flexibility in choosing specialists and other health care options. 

To help visualize who would be a good candidate for a PPO plan, take Madison. She's trying to conceive, so she chooses the PPO plan to give herself the freedom to choose the best fertility doctor in her area. Although she'll have to pay more money because this specialist is out of network, her main goal is to get pregnant and therefore is willing to make a financial sacrifice. She's able to afford a doctor outside of her plan's network, so this isn't a major issue for her.

Exclusive Provider Organization (EPO)

While an HMO and PPO are at opposite ends of the spectrum, an EPO is somewhere in the middle, combining aspects from both plans. An EPO plan is more flexible than an HMO and more affordable than a PPO. Similar to a PPO, an EPO doesn't require you to obtain a referral to see a specialist. In addition, you aren't obligated to have a primary care physician to see a specialist. However, like an HMO, you're required to pay out of pocket if you see a doctor that's outside of your plan's network. Therefore, an EPO plan is suitable if you want the flexibility to be able to see specialists without a referral from your primary care physician.

Claire has a thyroid condition and therefore sees her specialist a few times a year. Because she travels often, she knows that she needs an insurance plan that'll allow her to seek care away from home. Therefore, she chooses an EPO. Not only will she be able to find a specialist within the network, but she doesn't need a referral from a primary care physician. She's willing to pay a bit more for this convenient feature, which makes her a great candidate for an EPO plan.

Contact Your Local Health Insurance Broker

Insurance is complicated, which is why our team of skilled professionals at Sackett & Associates Insurance Services is here to help. Whether you need help choosing an insurance plan or want some more information about individual health insurance plans, our expert agents will work with you to find the plan best suited for you and your family. Contact Sacket & Associates Insurance Services to learn more about how we can help you choose