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EPO vs. HMO Insurance

All health insurance is designed to help you minimize your out-of-pocket costs and keep you from having to pay large medical bills. While it all shares the same general objective, health insurance comes in different varieties. Two commonly used types of health insurance are the exclusive provider organization, or EPO, and the health maintenance organization, or HMO.

  1. EPO Insurance

    • The basic idea behind an exclusive provider organization is that you work with a small network of medical facilities to receive treatment. If you need any type of medical treatment, you go to one of these providers and receive a large discount. This type of insurance doesn't provide any coverage for out-of-network visits. The EPO sets up contracts with a small number of doctors and medical facilities and guarantees certain rates to policyholders. This is much like the PPO, or preferred provider organization, type of health insurance, only on a much smaller scale. Preferred provider organizations have large networks of medical facilities that you can access across the country, while EPOs are usually only for a particular geographic area.

    HMO Insurance

    • The health maintenance organization also involves a network of doctors and medical facilities. With this type of health insurance, you have a much larger network to choose from. If you have HMO insurance and go to a doctor that's out of your network, you have to pay the entire bill out of your own pocket. This type of insurance is usually sold on a national scale. You can access the network of providers regardless of where you live.

    Referrals

    • One of the key differences between the exclusive provider organization and the health maintenance organization is in how referrals are handled. With a health maintenance organization, you have to receive a referral from a doctor before you can go see a specialist. This adds to the cost of your total health-care expenses because you essentially go to a doctor even though you know you need to see a specialist. With an EPO, you can go to a specialist without having to get any type of referral.

    Cost

    • When comparing EPOs and HMOs, EPOs typically have smaller insurance premiums associated with them. This is because they have a smaller network of doctors and medical facilities to work with. People who use EPOs are usually in rural areas or in areas that don't have an abundance of medical facilities in the vicinity. This can limit your choices, but at the same time you can save money by paying less for your monthly health insurance premiums.

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