What Is the Difference Between an EPO & an HMO?

EPO stands for exclusive provider organization, while HMO stands for health maintenance organization. Although they are similar plans, there are certain differences such as out-of-pocket expenses and flexibility for the insured with regard to providers within these types of health plans.

General Premises

• Both an EPO and an HMO are set up so that the plan members must use the providers who are in the plan's network to receive the plan's benefits. A basic difference between the two is that, with an HMO, the insurance company pays the costs of a claim; with an EPO, the costs are paid by the employer.

Cost Considerations

• An EPO will generally cost more as of 2010. For example, if a physician requires additional lab work or office visits, those costs will come out-of-pocket for the plan member until the deductible is reached. In an HMO, members have a flat co-payment for office visits and services, and the insurance carrier is responsible for any remaining associated costs.

Referrals

• In an HMO, a plan member must receive a referral from their primary care physician before seeing a specialist, for the HMO to provide coverage. However, in an EPO, a member has access to a specialist without needing a referral.