In a PPO (Preferred Provider Organization), insurance companies contract with doctors, hospitals, and other providers to form a “network.” Depending upon your plan, you can sometimes get health care outside the network (someone or someplace not included in the network) but you will have to pay more. Unlike an HMO, you usually can see a specialist without first being referred by your primary care physician, and you have much more freedom in choosing a doctor or hospital. Staying inside your network means smaller co-pays and full coverage. If you choose to go outside your network, you’ll have higher out-of-pocket costs, and not all services may be covered.
In general, PPO plans tend to be more expensive than an HMO plan. Your monthly premium will be higher and you will have to meet your deductible before your health insurer starts paying. You will also have to pay more out-of-pocket if you visit a provider who is not part of your PPO network.
Pros of a PPO Plan
- You have access to a large network of doctors and hospitals.
- You don’t need to wait for referrals or pre-approvals from your PCP.
Cons of a PPO Plan
- You must be prepared to pay for your monthly premium, copays, your deductible and coinsurance.
- You will have to pay a higher amount if you use a non-network provider.
EPO (exclusive provider organization) plans combine the flexibility of PPO plans with the cost-savings of HMO plans. You won’t need to choose a primary care physician, and you don’t need referrals to see a specialist. But you’ll have a limited network of doctors and hospitals to choose from. And EPO plans don’t cover care outside your network unless it’s an emergency. It’s very important to know who participates in your EPO plan’s network. If you go to a doctor or hospital that doesn’t accept your plan, you’ll pay all costs.
HMO vs. PPO vs. EPO
HMOs tend to be more affordable, but you’ll usually get less coverage and more restrictions. PPOs are more flexible and provide greater coverage, but come with a higher price tag and probably a deductible. If you prefer to have your care coordinated through a single doctor, an HMO plan might be right for you. If you want greater flexibility or if you see a lot of specialists, a PPO plan might be what you’re looking for. And if you’re interested in saving money by using a smaller network of doctors and hospitals, an EPO plan might be a good fit.