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What Does an EPO Insurance Policy Stand For?

Navigating the crowded field of health insurance options is a challenge that carries major consequences for your personal financial health and physical well-being. For employers, selecting a health plan to offer to employees as a benefit is equally complicated. Exclusive provider organizations, or EPOs, are one option that usually features a reasonable price.

  1. Definition

    • EPO stands for exclusive provider organization. An EPO is a managed health care plan that includes a list of specific doctors who participate in the program. The term "exclusive" in the name of the plan refers to the fact that customers only receive coverage for care through doctors and health care providers within the EPO network. Only in cases of emergency will an EPO cover policyholders for care through out-of-network providers.

    Function

    • As the name implies, EPOs rely on exclusivity to control costs and manage care for policyholders. In an EPO, health care providers only receive payment for the services they actually provide, which differs from other types of exclusive health care organizations. The exclusivity of an EPO ensures that participating providers will receive new patients regularly and that those patients will have limited options, making them more likely to receive more income-generating care through the same provider.

    Features

    • EPO policies have a number of features, other than relatively low prices, that attract health insurance customers. EPOs usually feature annual deductibles, which means that once customers reach their deductible limit for a given year, the insurance no longer charges a deductible for future claims during the remainder of the year. They also provide a high level of coverage -- up to 90 percent in some cases -- for in-network care. In some cases, EPOs also provide coverage for preventive treatment, up to 100 percent of the cost to patients.

    Alternatives

    • Two of the major alternatives to an EPO are health maintenance organizations and preferred provider organizations. HMOs pay providers regular monthly fees regardless of the care they provide, hence the use of "maintenance" instead of "provider" in the title. PPOs typically cost more than EPO plans because they cover care through a list of "preferred" providers, but also cover care, albeit at a lower percentage, through non-preferred providers.

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