Understanding the Differences of PPO, HMO, POS and EPO Networks

Let's dive right in and identify the types of networks that are available and how they impact your access to healthcare.

When choosing between Health Insurance plan options one of the major points of consideration is the network options that the plan may come with. 

When shopping in an individual network you are choosing the plan that is best for you where those choosing plan options for Employee Benefits packages a Group Health Insurance suite of plans may benefit from having multiple plan options to choose from.

Here are the four major plan networks and how they differ from each other.

Preferred Provider Organization (PPO) 

Preferred Provider has higher premiums than a Health Maintenance Organization (HMO) or Point of Service (POS) network but this plan lets you see specialists with both in and out-of-network doctors without a referral. Copays and coinsurance for in-network doctors are typically lower than in other networks so the insured is more likely to seek out care if needed. 

This network is optimal for those who have healthcare needs with providers that do not participate in insurance networks as those who are insured can seek care both within the PPO network and out of it.

While there is certainly a premium for seeking care outside of the PPO network, many like the ability to have a fixed set of costs in the event they prefer to receive care from out of network providers.

Health Maintenance Organization (HMO) 

One of the most affordable types of health insurance networks, HMO plans consist of a network of doctors, hospitals and other healthcare provider groups who agree to a fixed payment structure for healthcare services rendered to its "members".  One is a member of the HMO network simply by electing an HMO health insurance plan.  This structure allows those providers to have a steady flow of business directed their way while also being able to provide better pricing for care than a PPO network. 

In an HMO plan, the insured is usually required to have a designated Primary Care Physician (PCP) that develops a relationship with their patients that puts them in a position to deliver higher levels of care.  The PCP is often required to provide a referral to their patients for them to see specialists or surgeons.

Some enjoy the gatekeeper method found in HMO plans as it can help them save money and have confidence about how they spend their dollars budgeted for healthcare while others prefer to be able to schedule meetings with specialists without having to obtain a referral beforehand.  

Point of Service (POS) 

It is safe to think of a Point of Service (POS) plan as being a blend between the PPO and HMO style network plans.

Like an HMO, the POS plan requires you get a referral from your primary care provider before seeing a specialist.

Like a PPO, the POS plan provides coverage for both in and out of network providers.

In these plans there is the possibility of paying the discounted in network pricing if the Primary Care Physician refers the insured to an out of network specialist.

Exclusive Provider Organization (EPO) 

An Excusive Prover Organization or EPO is perhaps the most appropriately named network.

Members who elect plans in this network are covered only when using providers that are exclusively part of the network unless there is an emergency situation.

Similarly to a PPO network there is no requirement to receive a referral before seeing a specialist.

Similarly to an HMO network there is no coverage outside of the providers that are considered to be in network by the plan.

These plans can often offer discounts to the PPO, POS, and HMO networks when it comes to monthly premiums which can be advantageous for those that do not need coverage from out of network providers.

While many view the premium savings as a welcomed advantage, we often recommend that EPO plans be used in combination with PPO and POS plans in company offerings so that employees who may need an out of network provider option and employees who prefer the lowest premium can both have a plan that may closely fit their needs.

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