Health Insurance

PPO vs HMO vs EPO vs POS explained

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A health insurance network is a group of doctors, hospitals and care providers that the health insurance company contracts with to provide medical services. Every health insurance policy offered through employers or individual marketplaces has a provider network attached to the plan.

The main differences between these networks are the cost of the policy and where you can receive coverage. For this reason, the best type of health insurance depends on your financial situation and health care needs.

What are health insurance networks?

All health insurance policies have a specific type and network. These distinct networks differ in several ways. For example, the type of coverage and care you receive may depend on the network.

What is a provider in the context of health insurance?

A health care provider is a health professional or facility licensed to provide health care services or diagnosis. A provider will often get reimbursed for their services by a health insurance company.

What are the different types of health insurance organizations?

There are four core types of health insurance: Exclusive Provider Organization (EPO), Preferred Provider Organization (PPO), Point of Service (POS) and Health Maintenance Organization (HMO). Although these are the most common, there are some additional types of health insurance that you can purchase.

The main differences between these health insurance organizations are the level of cost sharing and where you can get coverage.

Exclusive provider organization (EPO)

An Exclusive provider organization (EPO) is a health care organization in which the health insurer will only provide cost-sharing coverage if you visit providers within the network. This means that if you visit a hospital or doctor that is outside the specified network, then you need to pay the full cost of that service instead of only bearing some of the expense.

The only exception to this is in case of an emergency. In this case, if you are taken to an out-of-network hospital in an ambulance, then you will still have the cost-sharing benefit outlined in your health insurance policy.

EPO details

  • Average cost: $492
  • Best quality: Cheap coverage

Preferred provider organization (PPO)

A Preferred provider organization (PPO) is a health insurance organization that provides cost-sharing benefits if you visit in-network health professionals and facilities. However, it differs from an EPO in that when you go to out-of-network providers, you also receive some cost-sharing help. A PPO costs more than an EPO since you are given more flexibility to choose where you want to receive your coverage.

A main advantage of a PPO is that you do not need to receive a referral to visit a health care specialist, such as a chiropractor. Under other provider networks, you may need to first visit your primary care provider (PCP), get a referral of care for the service and then visit the specialist for your needs.

PPO details

  • Average cost: $561
  • Best quality: Freedom of choice

Point of service (POS)

With a Point of service (POS) health insurance plan, you pay less visiting in-network doctors and hospitals. A POS plan requires you to first visit your PCP if you want to visit a specialist for medical services. Unlike with an EPO, individuals with a POS health insurance policy still have the option to visit out-of-network providers at a slightly reduced rate.

Due to this increased freedom to choose your doctor, you are required to pay a higher monthly premium for a POS health insurance plan.

POS details

  • Average cost: $508
  • Best quality: Affordable with out-of-network coverage

Health maintenance organization (HMO)

HMO health insurance policies only provide coverage for doctors and facilities in contract with the HMO. As with an EPO, you will not receive cost-sharing benefits if you visit an out-of-network provider.

A unique quality of an HMO is that often it can include integrated care, such as prevention and wellness programs. For many individuals that may require special care, this can be an excellent selling point of an HMO. Additionally, since this type of health care is restrictive in who you can visit for care, it is typically the cheapest option.

HMO details

  • Average cost: $479
  • Best quality: Budget-friendly

Which type of health insurance is the best?

In general, the best type of health insurance for you will be the one that balances costs and your health care needs.

If you are an individual who needs to see a specialist often and wants increased flexibility for who you want to visit, then the best health insurance for you may be a PPO. You will be able to easily seek out your care, without the impediment of getting referrals, while also paying reduced rates for out-of-network care.

On the other hand, if you do not mind having restrictions on where you receive coverage, then a cheap HMO policy could be your best option. Furthermore, if you are healthy and do not have many medical issues, then this might be the ideal choice.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.