You’re about to choose a health plan – but, you can’t figure out what all those letters – HMO, PPO, EPO, and POS mean. In picking the best health plan for you and your family, you first have to figure out the difference between all of them.
Unless you already know what HMO, PPO, EPO, and POS all stand for…like most people subscribing to a healthcare plan sold on the individual marketplace these days…you’re either totally in the dark or only have a vague idea what you’re getting with each one.
Plan types determine what access members have to providers in and out of its network, as well as set cost-sharing (co-pays) for medical visits and treatment. And, because industry-wide definitions of plan types are not necessarily clear and state standards vary somewhat, individual insurers frequently market similar plans under different names, adding to the potential confusion.
To help clarify things a bit, below are the four plans in simple detail:
1. HMO – Health Maintenance Organizations (HMOs) cover you only for care that is provided by doctors and hospitals that are in the specific HMO’s network. Members of HMOs are often required to obtain a referral from their primary-care physician in order to be seen by a specialist.
2. PPO – Preferred Provider Organizations (PPOs) cover you for care that is provided by the plan’s providers both inside and outside the network. A higher percentage of costs for out-of-network care are generally paid by members.
3. EPO – Exclusive Provider Organizations (EPOs) are comparable to HMOs in that they don’t typically cover you for care obtained outside the plan’s provider network. However, members may not require a referral in order to see a specialist.
4. POS – Point of Service (POS) plans tend to vary, but are commonly a hybrid between the HMO and PPO plans. While members may need a referral to be seen by a specialist, coverage for out-of-network care may also be available, but with a higher cost-sharing (co-pay).
Keep in mind that not all PPOs are alike as with the other plans. Some insurers may offer different out-of network coverage than another. Again, you have to do your homework. Determine which plan seems to make the most sense for you and your family and compare.
HMOs and PPOs were the most dominant plans offered this year by insurers on the open health insurance exchanges. An analysis of plans sold in the 36 states participating in the federal government run online insurance marketplace in addition to the plans available on the California exchange showed that HMO offerings made up 40 percent along with another 40 percent for PPOs. Accounting for 12 percent were POS plans and 7 percent for EPOs.
When evaluating a plan, be prepared to ask three basic questions:
• Is there out-of-network coverage?
• Does that out-of-network spending accrue toward the member’s out-of-pocket maximum?
• Do members need a primary-care physician gatekeeper for referrals?
Don’t assume higher premiums for similar health care automatically means the out-of-network coverage is superior. With patience and the appropriate research you’ll find the right health plan for you.
Also, don’t assume you’re getting the best rate on your health insurance. Why not get a free health insurance quote today?