Should I Get an HMO, PPO, EPO, or POS?

What is the Difference Between a HMO, PPO, EPO, and POS? Which One Should I get

HMO, PPO, EPO, and POS are all different types of health insurance provider networks offered by health plans. Of those HMO and PPO are the two most common.

Below we help you understand HMOs, PPOs, EPOs, and POSs, each of which being a different type of provider network your insurer coordinates with its own unique pros and cons (generally there is a trade-off between network size and costs, where narrower networks generally result in less costs), to help you understand which one might be the best fit for you.

HMOs and PPOs Explained

HMOs and PPOs are, as noted, the most common organizations that insurance companies use to group medical providers into networks involving more or less cost-sharing. Medicare and Medicaid use managed care structures like these as do most marketplace plans. They all include specific groups of healthcare providers but vary in your cost-sharing and other specifics.

A Health Maintenance Organization or HMO uses a single network of providers. All your services come from a single primary care physician who will either take care of you or give you a referral to another provider in your network. Specific services and medications must be pre-authorized, but your Primary Care Physician will do the paperwork. You will not need a referral to see an obstetrician/gynecologist (OB/GYN) for routine care as long as they are in your network. Most HMOs will pay for emergency out-of-network care.

A Preferred Provider Organization or PPO allows you to go to any health care professional without a referral. If you see a provider in your network, you will have smaller copays. If you see a provider who is not on your network, you can expect a higher out-of-pocket cost and there may be some services that are not covered. Certain services and medications must be pre-authorized and your doctor may need to do the paperwork. You will probably need to file paperwork for out-of-network claims. PPO plans are usually more expensive than HMO plans.

What Other Plans Are There? – EPOs and POSs Explained

EPO and POS networks are far less common than HMOs and PPOs, however they are most certainly choices on some marketplaces. So let’s cover those next.

An Exclusive Provider Organization or EPO covers care within a given, and usually limited, network but seldom requires referrals. Certain services and medications must be pre-authorized, and you may need to do the paperwork, especially if you want to see a specialist who is out-of-network. Thus, this is sort of like an even more limited version of an HMO where the insurer brokers a deal with a very specific provider network.

A Point of Service or POS plan is a hybrid HMO/PPO. You will need a referral to a specialist and may have some coverage out-of-network with higher cost sharing. Certain services and medications must be pre-authorized, and you may need to do the paperwork. You will probably need to file paperwork for out-of-network claims.

How Do I Choose a Plan (Considering Networks as Part of Your Plan Selection Process)?

Almost all health insurance plans are one of the above four managed care plans. The differences between them are the provider networks and the requirements each plan has for you to use it. There will always be a trade-off between the costs and benefits of a plan. The more you pay for monthly premiums and cost sharing, the more freedom you have to choose providers. The less you pay (and the more restrictive your network of providers is) the less flexibility you have. Many people trade flexibility for affordability since more rigid plans with fixed networks tend to be most affordable.

Author: Linda DeSolla Price

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