EPO vs PPO vs HMO: Everything You Need To Know

To avail employee benefits, it may turn out to be challenging to understand the health care industry for people who don’t invest their time in it. The simple concepts related to healthcare can be incomprehensible, for instance, understanding the comparison between EPO vs PPO vs HMO is challenging to understand for employees and managers.

With some differences, there are many similarities between Exclusive Provider Organizations (EPOs), Preferred Provider Organization (PPOs), and Health Maintenance Organization (HMOs). If all three plans are provided by your healthcare service provider, determining which coverage is suited well for you is crucial and will rely on the particular condition of your family. 

The choice made by you will depend on your salary, lifestyle, and job, along with the general health, stability, and medical needs of your family. It is crucial to note down all the factors before picking a plan, instead of assuming that one plan is better than the other just by looking at the letters, it is preferable to go into depth.

In regards to picking between EPOs, PPOs, and HMOs, the similarities between the plans have been increasingly high in the past years. So, what matters more is the service provided under each plan that helps the employee distinguish them. 

Which Plan To Choose From? 

Having a better understanding about health care industry can prove to be beneficial when you are selecting a health plan. So, which plan is right for you?

Either of these plans gives flexibility in which providers you can see, whereas, others may need you to get the insurance company’s permission or pre-authorization before getting any medical procedure done. Before choosing any plan, ask yourself: 

  • What ailments do I have? 
  • What is my financial situation? 
  • In return for a lesser monthly premium, can I pay a higher deductible? 
  • Would I require an outside network provider? 
  • What are the healthcare needs needed by me and my family?

However, your choices may get restricted if you are getting health care insurance through your workplace. But whatever the case, you will find yourself with a policy that meets your needs. 

Exclusive Provider Organization (EPOs)

Exclusive Provider Organization
Source: slideserve.com

An Exclusive Provider Organization is a form of the health care plan in which members are expected to utilize doctors and providers within the network of EPO, apart from during an emergency situation.

While you must select a primary health care doctor for certain EPOs, you won’t require a referral to have contact with a specialist. EPOs differ from Health Maintenance Organizations, as they offer great flexibility to members when it comes to choosing a health care plan. 

But like an HMO plan, members of EPOs are responsible for paying all the expenses when you choose to go out of the network. You may want to consider choosing an EPO plan if you’re aiming at paying for lower monthly rates and are able to pay a larger deductible when you require healthcare.

Financially, an EPO plan might work best for you if you have chronic diseases. It leaves out the need to go through a plethora of decisions related to healthcare through a primary care physician, which typically providers more network doctors than an HMO plan.

So, as an employee, you want to take that into consideration. EPOs network extends nationwide like HMOs, and like HMOs, Exclusive provider organization also requires members to pay the costs for any outside network medical help.

But unlike an HMO, you don’t require a referral to have contact with a specialist. 

Preferred Provider Organization – PPO

Preferred Provider Organization -PPO
Source: slideserve.com

A Preferred Provider Organization is a form of health care plan that includes a health care service network, which is similar to HMOs. The health plan includes a wide range of providers.

You don’t have to choose a care provider and you won’t require any referral to contact a specialist. Since PPOs plans are less limited than other types of health care plans, they tend to high monthly premiums and often require increased expense sharing. 

Unlike a Health Maintenance Organizations, PPOs allow their members to look for providers outside of their network providers. But that way, you will end up paying more out of your expenses if you tend to seek an outside provider.

Even if your non-participant doctor supports the PPO fee, since the provider isn’t a participant, the plan may require you to pay extra money. What distinguishes PPO over an EPO plan is its great flexibility.

PPOs provide members with far many choices about when and where to look for healthcare. According to specialists at Single Care, A PPO plan is preferable when you have severe medical issues.

PPO provides the largest nationwide healthcare service network, and if you select an outside network provider, they can cover certain costs. PPOs are considerably the most costly from either of the health care plans, but it is also the most flexible. 

Health Maintenance Organization (HMOs) 

Health Maintenance Organization
Source: ichoose.ph

A Health Maintenance Organization is a form of health care plan which provides access to a wide range of local hospitals and doctors for its members. Out of Exclusive and Preferred Provider Organization plan, HMO tend to have monthly health plan with low premium.

If you don’t have an issue with having a care provider, an HMO might just be perfect for you. You have to pay more in order to get a low monthly premium.

With lesser network restrictions, HMOs tend to have lower premiums monthly. But they require referrals from a primary care provider and won’t cover expenses if they go out of the network apart from emergencies.

For those of you who are in good condition, and only require medical care in the form of check-ups, then it is preferable to choose an HMO plans with low monthly premium and higher deductible. This can help curb expenses, unless you are in some sort of accident. Otherwise, it is not suited for everyone.

If you end up visiting a doctor outside of your chosen network, you will normally have to pay a higher sum than you would for an in-network service. Still, most plan would cover a share of the cost. Unlike PPOs, and EPOs, Health Maintenance Organization health care plan does not require pre-authorization.

If it is needed, then it is covered by your primary care doctor. The insurance specialists at Cigna have paved out a chart denoting the main differences between the three different plans.

EPO vs PPO vs HMO: Quick Comparison

 HMOPPOEPO
PCP RequirementYesNoSometimes
Coverage When There Is No NetworkIn case of emergencies onlyYes, with higher cost. In case of emergencies only. 
Referrals RequiredYesNoNo
Pre-Authorization Required Not always, if needed, PCP does it. YesYes 
Cost-Share Usually Lower Usually Lower Usually Higher in case if you seek help outside of the network provider. 
Claiming Paperwork No Needed when you make outside network claims. Needed when you make outside network claims.

Which Option Plan is Cost Friendly? 

A healthcare plan with a lower monthly premium would be one of the most cost-friendly health plan you can avail. That also increases the deductible, which means this plan can turn very costly if you end up being in an accident or contract a chronic disease.

That is why it is preferable to not look for a plan that is the cheapest, instead look at the out of pocket costs. At the end of the end, it is better to get quality for the quantity you are paying. 

The cost of health insurance greatly differ based on the place you live, but if you are still young, you can avail monthly premium that is under $100. Then again, if you get wind up in an accident, you will be paying high deductible.

Another thing to keep in mind is co-pays. Before even meeting your deductibles, a few policies, for instance, HMOs, may start paying a share of the budget for occasional doctor’s visit, etc. Whereas, other providers may not, especially PPOs. So, the fee of seeing a doctor may vary from $10 to $100, all of which depends on the coverage of your policy and the doctor. 

Another way of curbing your expenses is through choosing a policy which has coinsurance features. Such policies tend to have lesser monthly premiums. But you will still have to pay a share of your medical expenses even after meeting the deductible. 

Final Word 

At the end of the day, everyone requires a different health care plan, which is why it is crucial to be aware of the different aspects of each provider. Some plans need members to do regular medical services, while others may require filling their prescriptions.

With people have their own medical needs, it is difficult to pinpoint what kind of plan will be suited for who. The answer varies from one individual to another.

So, out of the three, which plan should you be choosing from? The choice depends on your medical needs. Whatever choice you make, it is important to be well aware of all the aspects.