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 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 Plans | PPO Plans | EPO Plans | POS Plans | |
|---|---|---|---|---|
| Overview | HMO plans typically require you to choose a primary provider, or primary care physician (PCP), in the HMO plan network. This provider will refer you to other network providers as needed. Premiums are often lower because of the defined network which can help control costs. These plans may also offer low or no deductible options. |
PPO plans tend to give you more flexibility to choose the providers you prefer to visit for care. If you choose an out-of-network provider, you’ll likely pay more. Premiums tend to be higher and are commonly paired with a deductible. |
EPO plans generally let you see any network provider you choose. There’s no requirement to choose a primary care physician or get referrals to see a specialist. These plans do not offer out-of-network benefits. |
POS plans usually require you to get referrals to see specialists. Most plans will have some coverage for out-of-network care — often with a higher copay. |
| Doctor/provider details | Providers or doctors either work for the HMO or contract for set rates. |
Networks include providers and facilities that have negotiated lower rates on the services they perform. PPO health plans have access to those negotiated rates. | Doctors and facilities that participate in an EPO are paid per service. 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 plan members. |
Network providers have negotiated rates on medical services for members with a POS health plan. |
| Network vs out-of-network care | For most plans, you’re required to use health care facilities or doctors that are in the HMO network. Out-of-network care is typically allowed in emergency cases only. |
When you choose a provider in the network, you may have lower out-of-pocket costs than if you choose out-of-network providers. Out-of-network care is usually included in the benefit plan, but it may be at a reduced level of coverage and benefits. |
May restrict your coverage to care in the plan network. |
Coverage is generally for care in the plan network for services. |
| Referrals | With most plans, you’ll need to choose a PCP. This PCP is your main health care contact and care is often coordinated through them. You may need to get a referral from your PCP to see a specialist. | It's less likely that you’d need to choose a PCP and less likely to need a referral to see a specialist. But some plans may require this, so check the network requirements to understand the details of your plan. | It's less likely that you’ll 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 the plan network. | Often a PCP will coordinate your health care. You’ll need referrals from your PCP to see a specialist or go out-of-network for care. |
| Preapprovals | You may need to get advanced approval before having certain medical services performed. In many cases preapproval will be handled through your PCP, if you have one. | Almost every network requires preapprovals for some medical services. Because a PPO plan gives more freedom to choose your preferred providers, you may need to get more preapprovals. |
Preapprovals are more likely needed before having certain health care services, because you’re not required to have a PCP overseeing your care. |
Some health care services will need preapproval. However, if you have A PCP, they will often take care of preapprovals for you. |
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.
Did you know...
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 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.
Did you know...
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 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.
Did you know...
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.
What network should you pick?
Everyone is looking for something slightly different out of their health insurance, so this is really a question you have to answer for yourself. But there are a few pointers you can keep in mind:
- Before you start looking, make note of your “need to haves” and “want to haves” in terms of your provider network and benefits. Also, list any doctors or hospitals you want access to. Keep that information at hand while you shop.
- Check the networks you’re considering for doctors, hospitals and pharmacies near to you before making any decisions, especially if easy access to care is important.
- If your doctor’s already in-network, or you’re flexible about where you get care and can easily stay in-network, then choosing an HMO or EPO may mean a lower cost for you each month.
- If you need the freedom to go outside a narrow network and still get some benefits from your coverage, then look at PPOs or a more flexible POS plan.
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Short term health insurance underwritten by Golden Rule Insurance Company may be just the fast, flexible solution you need for your temporary coverage. It provides access to large nationwide provider networks through UnitedHealthcare and coverage can be available as soon as the next day in many cases.
