While sifting through your health insurance options, you’ve probably noticed these acronyms – HMO, PPO, EPO, and POS, and likely shrugged and moved on. Who can blame you?! Health insurance companies use a lot of acronyms, and it can be challenging to understand what you’re reading. However, it’s important to learn these abbreviations, as being in the know could save you a lot of money.
All health plans have a network of providers (referred to as “in-network”) that you can use to get lower rates and better care. However, how you access that network will depend on the type of plan. HMO, POS, PPO, and EPO are all acronyms for the different plan types available in the Marketplace. Each plan type is differentiated by their network and coverage options and identify which doctors you can see and how the costs will be covered.
What do these acronyms mean?
Health Maintenance Organization (HMO)
This is one of the cheapest health insurance options, as it has low premiums and deductibles, and fixed copays for doctor visits. An HMO plan only allows you to see doctors who work for or contract with the plan. You will have a primary care physician (PCP) who coordinates your care and can refer you to in-network specialists. An HMO plan will not cover any out-of-network care except in an emergency and even then, may only cover a percentage of the cost for that care.
Point of Service (POS)
This type of plan allows you to pay less if you use doctors, hospitals, and other health care providers that are in-network. Like an HMO, a POS plan requires you to get a referral from your primary care physician before seeing a specialist. Unlike an HMO, this plan covers out-of-network doctors, though you’ll have to pay more. This is important to note if you have a condition or use doctors that are not in-network.
Preferred Provider Organization (PPO)
This is one of the most common types of health plans. A PPO lets you see any provider you want and you don’t need a referral to see a specialist. While the premiums are a bit higher than other plan types, copays and coinsurance for in-network doctors are low.
Exclusive Provider Organization (EPO)
This plan type is less common than HMOs and PPOs but shares certain features of both. Like HMOs, EPOs cover only in-network care, but networks are larger than for HMOs. Also, in the event of an emergency, EPO insurance will cover some of the costs of your out-of-network expenses. Like PPO insurance, you can see a specialist without a referral from your PCP. With this type of plan, premiums are higher than HMOs but lower than PPOs.
What are the main differences between each plan type?
We know that was a lot to digest! Here is a simplified view of what we covered in the previous section:
What plan type is right for me?
When thinking about which type of plan to get, there are a few things to keep in mind. Think about your specific health needs – if you’re on a budget and you don’t have any medical issues, you may opt for an HMO plan. If you require a lot of health care and you can afford higher premiums, a PPO plan could work best for you.
Maybe you have a set of doctors that you like and don’t want to switch to another provider. When you’re selecting a health plan, check to see if they will be in your network. If they’re not, take some time to think about how much you are willing to/can afford to pay for out-of-network coverage. If you’re ok with the expenses, a PPO or POS plan are your best options. If you’re ok with staying in-network, but don’t want to have to deal with getting referrals, an EPO might be your top choice.
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