Insurance Education

HMO, EPO or PPO: Decoding Health Insurance (Part 2)


Have you ever wondered if your doctor was in-network? Has your employer ever changed insurance carriers and you were most worried about whether or not you’d be able to keep your primary doctor or your kid’s pediatrician? I’ve had those concerns. I’ve even had to deal with changing doctors because my insurance carrier switched networks. But I didn’t ever really know why. When I finally asked questions, it felt like watching Abbott & Costello’s Who’s On First comedy bit. (I was definitely Costello!)

I mentioned this already in part one of our Decoding Health Insurance series, but all of the acronyms used in health insurance always remind me of that old Disney movie Rocketman. While I may not be preparing to go into outer space, the complexities of health insurance feel like learning rocket science, especially when you add in acronyms. Since I’ve learned a lot in the last several years, I decided it was time to help others understand who’s on first, what’s on second, and I don’t know on third.


In-Network Basics: HMO, EPO, and PPO Explained

The first time I heard about HMO’s was in some movie. The character in the film was really bummed that he was losing his job because he wouldn’t have his HMO anymore, which also meant that he would not have his doctor anymore. This was my first realization that people could (kind of) “lose” their doctors if they weren’t part of the right network or insurance plan.

HMO stands for Health Maintenance Organization. This is a well-organized, very tight-knit group of facilities and doctors. They are generally a smaller option, but can be a better option, and are always more affordable.  

One potential issue with HMO’s is that you may only go to a specialist that is referred to you by your Primary Care Provider (PCP, your main doctor). So if you got a recommendation from a friend, but your PCP doesn’t send you there, you’re simply out of luck. Many times, there will be zero coverage out-of-network.  

Networks are definitely a case-by-case situation. Many times, being part of an HMO means being part of a more limiting network. But for the cost savings, considering the deductibles are almost always cheaper with HMO’s over other networks, and the rest of the plan designs offered are so strong, it can be a great way to increase coverage and improve your benefits. Never overspend on a health insurance network that you don’t understand!


I was always told to search for a PPO network?

One of the most popular questions I get about networks is, “Does this plan have a PPO network?”  PPO stands for Preferred Provider Organization. Ironically, most people don’t even really know what that means. They just know that the “best” plans have those types of networks.  

PPO networks are the most expensive out there. They have the largest group of doctors in-network, and will often have out-of-network benefits with them as well. They certainly come with some “extras”, but often, the sense of “security” one gains from these remarkably expensive plans don’t always justify the additional costs they incur. Depending on your location, an HMO network may actually provide better care.

We always recommend talking with a Benefits Coach to work through all the details of your situation. No two people have identical needs. And, if you really want the security of a PPO network, certain sharing ministries can get you access to one!


So then what’s an EPO network?

An EPO network is something we may be seeing more often. EPO stands for Exclusive Provider Organization. It’s sort of a cross between an HMO and a PPO. You do not have to get a referral from your PCP to go to a specialist with an EPO network. As long as you find a doctor in-network, you’re able to use that provider.

One major difference is that PPO’s have large national networks, whereas EPO’s have large regional networks.  When EPO’s first started several years ago, just like their sister HMO plans, they were not able to cross state lines. However, more recent updates to both plan designs and networks have lifted this limitation, so certain EPO’s now can cross state lines. (This is especially helpful for border-cities like Louisville, KY).

There is also a fourth network option out there (it is just not as common as the others). This fourth option is called a POS network, which stands for Point Of Service. These are another hybrid model. You still need a referral from your PCP, just like an HMO, but you will have more out-of-network benefits than with an HMO. It can be beneficial in certain circumstances.


What happens when I’m traveling out-of-network?

Another question we get asked frequently when navigating the network conversation is, “What happens when you’re out-of-state?” Let’s say you have been willing or were forced to move away from your PPO network plan and now you’re “stuck” on an HMO that only has a local network. What happens when you’re traveling for work or vacationing in the mountains and you have a serious accident? Because of the ACA, emergencies are covered by all insurance companies, even if the hospital is not in your network. You may need to be initially treated, then transported back to in-network care depending on the severity. But rest assured, if you don’t know how to ski and goof it up, your insurance carrier won’t just leave you to heal on the side of a mountain.

Another example we commonly see with out-of-network expenses would be traveling internationally. (Many of our groups have teams that go on mission trips, so this is brought up often). One of our strategic alliances, Brotherhood Mutual, has something to help with this. One of their solutions, Faith Ventures, provides assistance with emergency medical evacuation and accident or illness medical expenses in the case of an international emergency.


Pro Tip: You can always just cash-pay your doctor

Just because your doctor is not in-network does not mean you’re not allowed to go to them. Many people do not know this, but if your network changes for any reason and you are already a patient, you can simply let the doctor’s office know you will self-pay. Just last week, I helped someone with this. Their doctor discounted the amount owed right out of the gate since they did not have to invoice and process it through accounts receivable. Many times, self-pay discounts can be just as competitive as in-network costs.

Whether you go with an HMO, EPO, PPO or a POS, ultimately, there is no “perfect” network. There is value to all four types of networks, and we recommend talking with a professional to determine which one might be best for your situation. Our goal is to help people steward their benefit dollars well, which is why we advocate double-checking, getting advice, and always negotiating when it comes to your insurance!