Health Insurance: EPO Vs. PPO

Both an EPO and a PPO can provide you and your family with comprehensive health coverage. EPO stands for "exclusive provider organization" while PPO stands for "preferred provider organization." These insurance plans offer the same type of coverage. The big difference is in how many choices you have when you sign up.

Function

• Both types of insurance use a system in which medical facilities, doctors and an insurance company work together. Customers can contract with an insurance company and pay premiums to them. In return, the customers get to access the network of medical facilities and doctors for a discount. Typically, when customers pay for medical services or treatments, they will be reimbursed a certain amount of money by the provider. When customers receive treatment from medical facilities that are not in the network, they may receive no reimbursement or a limited reimbursement.

Differences

• The basic concept of these two types of insurance plans are the same. You use a network of medical providers and get a discount. The biggest difference between these two types of plans is in the size. With a PPO, you will have access to a large network of doctors and medical facilities. PPOs are typically nationwide, and you can usually find providers in your area relatively easily. With an EPO, everything is done on a much smaller scale. You will not have nearly as many options to choose from when you need care.

Benefits

• Both of these types of insurance coverage have some specific benefits. In the case of a PPO, the big benefit is that you have many options to work with. You can generally find a doctor in your area to visit, and you can find hospitals or medical clinics close by that will accept your insurance. With EPOs, the benefit is that you can save money. Even though you have limited options to choose from, these medical facilities will generally give you a bigger discount and your premiums will be lower.

Out of Network

• Both of these plans discourage you from trying to get care outside your network of providers. PPOs tend to be more flexible when it comes to reimbursing you for expenses that were incurred out of network. Most PPO plans offer some type of reimbursement if you get service out of network. On the other hand, many EPOs do not offer any type of reimbursement if you go out of network for treatment. Others will provide you with only a small reimbursement.

Considerations

• Something else to consider with these types of insurance is in how they handle specialists. With an EPO plan, you will need to consult your primary care physician to get a referral to see a specialist. With many PPOs, you do not have to obtain authorization to visit a specialist. If you have an EPO, this may mean that you will have to pay to see a regular doctor just so he can tell you to go see a specialist.