HMO, EPO, and PPO Differences
One of the most confusing things about our healthcare system is the different networks, abbreviations, what they all mean, and how that impacts your healthcare and access to different healthcare providers.
If you’ve got any questions about the differences between an HMO, EPO, PPO, or key terms such as out-of-pocket costs, premiums, and network restrictions, please continue reading to learn how Custom Health Advisors can help you understand the nuances of the different types of health insurance coverage, so you can better navigate the American Healthcare System.
What’s the Difference Between an HMO, EPO, and PPO?
Understanding the different characteristics between HMO, EPO, and PPO plans can help you make the right choice when navigating different health insurance options.
An HMO, or Health Maintenance Organization, requires you to pick a primary care doctor that’s in the network. HMO networks are typically in your geographic area and resident state and require a referral to see a specialist in most instances unless you already have established care with the provider. HMOs usually cost less per month but offer fewer choices for doctors and hospitals.
An Exclusive Provider Organization, or EPO, will allow you to visit healthcare providers in your resident state but does not require referrals to see specialists. In 2024, all of the TN Marketplace plans are EPO networks. Monthly costs are similar to HMO networks.
A Preferred Provider Organization or (PPO) gives you the most choices. The network is large, often nationwide, and accepted by the majority of healthcare providers. You can go to any doctor or specialist in network without a referral. Staying in the network will save you more money as PPO plans will provide policyholders “provider discounts” where they’ll get pre-negotiated rates for medical services, often in the range of 40-60% off the regular billable amount, sometimes even more. PPOs generally cost more each month but offer the most options. Employer benefits plans are often on PPO networks.
Each plan has its own specific benefits like cost, flexibility, network size, deductibles, Rx coverage, mental health, maternity coverage, etc, which is why it’s crucial to understand the ins and outs of your policy when choosing your health plan. If you’re navigating the health ins sector, I’d be happy to help you break down the HMO, EPO, and PPO options out there, so you know you’ve got the right plan for what you need. Call me today to schedule a free consultation.
Table of Contents
Understanding Health Insurance Terms
HMO Frequently Asked Questions
Comparing HMOs and PPOs: Which Dental Plan is Better?
Commonly Asked Questions
Contact Custom Health Advisors Today
Understanding Health Insurance Terms
Understanding health insurance terms can help you make better decisions about your health care. Three important terms to know include out-of-pocket maximum, premiums, and network limits.
Premium: A premium is the amount you pay every month for your health insurance plan. Think of it like a membership fee that keeps your insurance active. Even if you don't use medical services, you still need to pay your premium to stay covered in the event of a medical emergency or significant diagnosis.
Deductible: A deductible is your buy-in amount before the insurance company takes over the majority/remainder of the remaining medical bills. Most plans have major medical deductibles ranging from $3,000-$10,000.
Out-of-Pocket Maximum: This is the most you’ll have to spend in a calendar year for covered medical expenses. Once you reach this limit, your insurance pays for your medical costs for the rest of the year. The OPM is what protects your assets from major medical bills. If an insurance policy doesn’t have an OPM, it’s really not considered a real insurance plan.
Coinsurance: Once you meet your deductible, the insurance company will split charges with you at an agreed-upon percentage until you reach your OPM. The split is often 80/20, 70/30, 60/40, or 50/50, with the insurance company picking up the lion’s share of the split.
Copay: Some health insurance plans offer copays for some medical services like Dr visits, blood work, x-rays, Rx, urgent care, PT, emergency room and hospitalization. This is a flat rate you pay the provider at the time of service. Some plan more of these services than others, which is why it’s important to have a thorough understanding of how your plan works in these instances.
Network Limits: Health insurance plans have a network of doctors, hospitals, and other healthcare providers. Staying within this network usually costs less. If you go outside the network, you might have to pay more, or your insurance might not cover the services at all.
With all the complexities of our healthcare system, the more knowledge you have, the more empowered you can be to navigate it and make the most informed decisions.
HMO Frequently Asked Questions
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If you go to a hospital that isn't in your network, your insurance might not pay for your stay. Consult your main healthcare provider before heading to the hospital. Your doctor can assist in directing you to a hospital that accepts your insurance in network. If you do end up at an out-of-network hospital, they'll move you to an in-network hospital when you're well enough for continued care.
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Get Medical Care: Visit a doctor or hospital within your HMO’s network for treatment.
Pay Copayment: If required, pay your copayment at the time of service.
Claim Submission: Your healthcare provider (doctor or hospital) typically submits the claim to your HMO on your behalf.
Claim Review: The HMO reviews the claim to ensure it aligns with your plan’s coverage.
Payment: Once approved, the HMO pays the provider directly for covered services.
Explanation of Benefits (EOB): You receive an EOB detailing what was paid and any amount you may owe.
Comparing HMOs and PPOs: Which Dental Plan is Better?
Choosing between an HMO and a PPO dental plan depends on what you value most in your dental care. HMO plans typically have lower monthly costs and ask you to select a main dentist from their network. This dentist coordinates your care and can refer you to specialists as needed.
PPO plans offer more flexibility—you can see any dentist you want, but you’ll typically pay more if they’re not in the plan’s network. If you prefer predictability in costs and don’t mind sticking with a specific group of dentists, an HMO might be right for you. For those who prioritize flexibility and are willing to pay a bit more for it, a PPO could be the better choice. I enjoy helping my clients understand the ins and outs of their health, vision, and dental coverage. Contact me today to schedule a free consultation.
Commonly Asked Questions
Are EPO Plans Worth It?
Considering an EPO, or Exclusive Provider Organization plan, can be beneficial if you’re looking for affordability and ease of access to healthcare. These plans usually cost less each month than PPOs and let you see many healthcare providers in their network.
While you don’t need referrals to see specialists within the network, it’s important to stay within the network for coverage—except in urgent situations. If you’re comfortable with the network’s options and prefer saving on monthly premiums without the hassle of referrals, an EPO plan could be a valuable choice for your healthcare needs.
Are HMOs and PPOs Available on the Marketplace?
As each state has its own individual marketplace and carriers that offer coverage, it depends on the state that you live in as to what types of networks are available on your state's healthcare exchange.
Contact Custom Health Advisors Today
With 15 years of experience in customer support, sales, account management, and helping clients navigate their options, I’d be thrilled to help you navigate the U.S. healthcare system and choose the best plan for your needs. Custom Health Advisors is based in Middle Tennessee and love working with clients in Nashville, Hendersonville, Brentwood, Franklin, and Spring Hill. Give me a call or text today to schedule a free consultation.
