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An In-depth Comparison of HMO, PPO, EPO, and POS Health Insurance Plans

An In-depth Comparison of HMO, PPO, EPO, and POS Health Insurance Plans

HMO, PPO, EPO, and POS are various health insurance plans sold by companies, and which vary from each other in features like deductibles and payments. The HealthHearty write-up below gives you a detailed HMO vs. PPO vs. EPO vs. POS comparison chart.
Buzzle Staff
Quick Information
Based on a recent analysis regarding the health plans sold on the California exchange for 2014, the following data was formulated:
  • HMO offerings culminated to 40%.
  • PPOs made up for 40%.
  • POS plans accounted for 12%.
  • EPO plans reached up to 7%.

The importance of having a health insurance policy can never be stressed enough. It is essential to have an insurance plan chalked out so that you can have a financial backing if and when you need medical assistance. This is applicable when you are injured because of an accident, or may be you have a terminal illness, or if you undergo a surgery and the like due to medical emergencies. Based on these factors and many others, companies research and establish a proper financial structure in order to help the aged , the elderly, and the injured in times of need. This structure can be of many types, and the write-up here will give an in-depth comparison of HMO, PPO, EPO, and POS health insurance plans. Read ahead to understand the difference between them.
Background
  • HMO stands for 'Health Maintenance Organization'.
  • This is a very restrictive plan and strict internal guidelines need to be followed if you intend to buy it.
  • An act passed in 1973 required that firms (having more than 25 employees) which offer health insurance traditionally, would have to offer HMO options instead.
  • PPO stands for 'Preferred Provider Organization'.
  • It is a kind of organization that allows a third party to offer medical care.
  • It is less restrictive and more flexible than the others.
  • EPO stands for 'Exclusive Provider Organization'.
  • It is very much like an HMO, except for the fact that external referrals provide subsidized rates.
  • POS stands for 'Point of Service'.
  • This plan is a hybrid mixture of HMO and PPO.
Differentiating Factors
HMO PPO EPO POS
In/Out Network
Mandatory Internal Network.

No mandatory internal network. Internal and external network More of internal network

Primary Care Physician (PCP)
Members have to choose PCPs within network
Members need not choose PCPs


Members can choose PCPs within network

Members can but need not choose PCPs

External Referals
Requires referrals from PCP
No referrals required Requires referrals from PCP No referrals required
Pre-authorization
Not required, usually Definitely required

Required


Generally not required
Insurance
Offers insurance coverage Less insurance coverage Substantial insurance coverage Lower insurance coverage
Cost-sharing
Less




High




Less




Less within network, high outside
Paperwork Claims
No paperwork necessary


Requires paperwork for external referrals No paperwork required


Requires paperwork outside network

Differences - Further Explained
HMO
  • In this plan, there is a detailed internal network of experienced medical professionals.
  • As mentioned in the table above, this plan is restrictive, i.e., it requires that you receive medical care only within the network. This is what will ensure high insurance benefits.
  • Here, you are required to choose your PCPs within the network. Also, you have to be treated and taken care of by them solely.
  • If at all the PCP feels you need a second opinion outside the network, he will recommend the same to you.
  • It is only after his referral that you will be allowed to see an external doctor. You will be provided insurance coverage for the same.
  • However, if you seek help outside the network without your PCP's referral, you will have to pay for it yourself, completely, without any deductions.

PPO
  • It is touted to be the most reliable plan.
  • Here, there is no compulsion on members to be a part of the internal network or choose their PCPs.
  • Though it is advantageous in a way, it has its flip side too.
  • Since you are not a part of the network, you will have to pay the deductible and other payments to the in-network doctors. Also, the insurance benefits are lower.
  • Though the plan pays for out-of-network doctors, the insurance coverage is not as high as it would have been if you had stayed inside the network.
  • According to statistics, if you go out of network, you will be responsible to pay for 40% of your medical bills.

EPO
  • As mentioned earlier, this plan is very much similar to the HMO.
  • In this plan too, you are required to be a part of the network and choose PCPs.
  • However, you need not pay for deductible here, though the plan does not pay for external care unless referred.
  • That is to say, if your physician refers you to another doctor outside network, you will receive insurance coverage.
  • Also, you will have to co-pay a small amount for internal network care.
  • Another notable difference is that this plan offers cheaper premiums but lesser physician networks.
  • Also, unlike HMO, EPO requires that your PCPs be paid for their services only when you are treated, and not on a monthly basis.

POS
  • As mentioned earlier, this plan is a hybrid mixture of HMO and PPO.
  • Some plans of POS require that you choose PCPs within the network, while some don't.
  • If you stay inside the network, you are offered good insurance coverage.
  • You can go outside network (with referrals), and if you do, you will receive lower insurance coverage.
  • What's important is that you do not need your PCP's referral for external medical assistance.
  • But you also need to remember that if you go in for external assistance without referrals, you will have to pay a higher deductible and other payments.
Basically, health plans are always aimed at reducing the financial burden of the victim at a crucial juncture. This is especially true in case of the elderly residing in retirement homes or the aged who need constant medical care. Also, if a person has a severe injury and needs a large amount of money for a surgery, health plans are the most beneficial. It is certainly of vital importance to think and choose the right plan. However, at the end of the day, remember that it is more prudent to have a plan, whatever the type. Do not keep getting muddled regarding what choice to make, for each of them has its own pros and cons. None of them is going to backfire on you, for they are all health plans and are structured with great care. Choose them based on your requirements and considering other domestic factors.