HMO = Health Maintenance Organization: HMO’s tend to have lower monthly premiums and lower cost-sharing than plans with fewer network restrictions, but they require primary care provider (PCP) referrals and won’t pay for care out-of-network except in emergencies.
PPO = Preferred Provider Organization: PPO’s got that name because they have a network of providers they prefer that you use, but they’ll still pay for out-of-network care. Given that they’re less restrictive than most other plan types, they tend to have higher monthly premiums and require higher cost-sharing. Although PPO plans were a common option in the past, they have become less popular in recent years as health plans reduce the size of their provider networks and increasingly switch to EPOs and HMOs in an effort to control costs. PPOs are still common among employer-sponsored health plans, but have disappeared altogether in the individual insurance market in some states (individual insurance is the kind you buy on your own—including through the exchange in your state—as opposed to obtaining from an employer)
EPO = Exclusive Provider Organization: EPO’s got that name because they have a network of providers they use exclusively. You must stick to providers on that list or the EPO won’t pay. However, an EPO generally won’t make you get a referral from a primary care physician in order to visit a specialist. Think of an EPO as similar to a PPO but without coverage for out-of-network care.
POS = Point of Service: POS plans resemble HMOs but are less restrictive in that you’re allowed, under certain circumstances, to get care out-of-network as you would with a PPO. Like HMOs, many POS plans require you to have a PCP referral for all care whether it’s in or out-of-network.
The six basic ways HMOs, PPOs, EPOs and POS plans differ are:
• Whether or not you’re required to have a primary care physician (PCP)
• Whether or not you’re required to have a referral to see a specialist or get other services
• Whether or not you must have health care services pre-authorized
• Whether or not the health plan will pay for the care you get outside of its provider network.
• How much cost-sharing you’re responsible for paying when you use your health insurance
• Whether or not you have to file insurance claims and do paperwork
Out-of-pocket expenses are what you pay for health-related services above and beyond your monthly premium.
Depending on your health plan, these expenses may include an annual deductible, co-insurance, and copayments for doctor visits and prescription drugs.
Deductible: A deductible is the amount you must pay out-of-pocket each year for health-related expenses before your insurance policy begins to pay. Deductibles are common in PPOs for health care services received outside the PPO network. If you have Medicare, you will most likely have to pay a deductible for medical services and a separate deductible for medications under Medicare Part D.
Coinsurance: Some health insurance requires that you pay a percentage of the cost of covered health-related services after you have met your annual deductible. This is known as coinsurance and most often is about 20% of what your health plan approves.
|Requires PCP||Requires referrals||Requires pre-authorization||Pays for out-of-network care||Cost-sharing||Do you have to file claim paperwork?|
|HMO||Yes||Yes||Not usually required. If required, PCP does it.||No||Typically lower||No|
|POS||Yes||Yes||Not usually. If required, PCP likely does it. Out-of-network care may have different rules.||Yes, but requires PCP referral.||Typically lower in-network, higher for out-of-network.||Only for out-of-network claims.|
|PPO||No||No||Yes||Yes||Typically higher, especially for out-of-network care.||Only for out-of-network claims.|