Alphabet Soup: HMO vs. PPO vs. EPO. Which one is right for you?

You seen these acronyms describing doctor groups before, but what do they mean and why should you care?

It all comes down to network "design" and flexibility

Each insurance company "contracts" with hospitals, doctors, nurses and other medical providers who agree to charge a discounted price for their services. This group of providers is called a "network." Some types of plans will cover you if you go to providers outside your network; others won't. Some plans also require that your primary doctor provide a "referral" before they will pay for a specialist doctor visit.

Here's the gist:

  1. HMOs only cover you if you stay in-network and require referrals to see specialists.

  2. PPOs often have higher plan premiums but offer partial coverage if you go out-of-network and don't require referrals to see specialist.

  3. EPOs also only cover you if you stay in network, but you can see specialists without referrals. Think of them as in-between an HMO and a PPO.

And here's the nitty gritty:

HMO: Health Maintenance Organization

An HMO delivers services exclusively through a network of doctors, nurses and hospitals. You are required to have a primary care physician ("PCP") who coordinates all of your care. To keep down costs, a referral from your primary care physician is required if you ever need to see a specialist in your HMO network. For this reason, primary care physicians in HMOs are sometimes called "gatekeepers." What if you see a doctor outside of your HMO's network? You will likely pay the full cost of care. Learn More

PPO: Preferred Provider Organization

This type of plan sets up networks with "preferred" providers from which you can choose. You do not need a primary care physician to refer you to other doctors in your network, so you can decide to use any provider in your network at any time. If you decide to go somewhere out-of-network, you will pay a higher amount but, unlike an HMO, you will be protected from paying the full cost of care. To be reimbursed for out-of-network care, you will need to pay the doctor directly yourself and then request a partial reimbursement from your insurance company by filing a claim. Learn More

EPO: Exclusive Provider Organization

EPOs are similar to HMOs — you have access to a specific network of care providers and there is no out-of-network coverage, except in the case of emergencies. However, you can see specialists without a primary care physician's referral. Learn More