What Are the Differences Between HMO, PPO, POS and EPO Plans?

There are several health insurance plans that are sold by insurance companies with some of the same features. Three managed health care plans, a Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and Point of Service (POS), along with an Exclusive Provider Organization (EPO), all provide members with networks of doctors that they can visit and receive greater insurance benefits. However, each plan has its benefits that address the needs of different health care applicants.

HMO Plans

• HMOs are the most restrictive of the three managed health care plans. Members must receive medical care by doctors within their provider networks. By staying in-network, members receive the highest amounts of insurance benefits that result in no deductibles and little to no co-payments. HMO plans require members to choose Primary Care Physicians (PCPs) from their provider networks. PCPs are in charge of their patients' medical decisions. They can refer them to other doctors and specialists who operate out-of-network, and members will receive insurance coverage. However, if they decide to go out of network without referrals from their PCPs, members will be solely responsible for all incurred medical costs.

PPO Plans

• The most flexible managed health care plans are PPOs. Members are not required to stay in-network for health care and do not have to use PCPs. The insurance benefits are not as high as HMOs because members will have to pay deductibles and co-payments when visiting network doctors. They can go out of network for care and still receive insurance coverage; however, it will be less than what they would have received for staying in-network. In fact, members can be responsible for up to 40 percent of their medical bills out-of-pocket by going out of network.

POS Plans

• POS plans are considered hybrids as they are made up of elements from both HMO and PPO plans. Like HMO plans, some POS plans require members to choose PCPs and offer the highest amounts of insurance benefits by staying in network. Like PPO plans, however, members are able to go out of network and still receive insurance coverage, but the amounts will be lower. Members do not have to get referrals for non-network care even if they have PCPs. However, out-of-pocket expenses, such as deductibles and co-payments, are substantially higher for members who do not get referrals for non-network care.

EPO Plans

• EPO plans work similar to HMOs as their members are required to stay within their networks for health services and choose PCPs to coordinate their medical care. Members do not have to pay deductibles, and they will pay small co-pay amounts for network care and can only go out of network and receive insurance coverage if they were referred. However, EPO plans provide fewer physician networks to their members than HMO plans, and their premiums are cheaper as well. Another difference is HMO insurers make monthly payments to their doctors while EPO plans pay their physicians only when services are rendered.