As you review health insurance plans, you will see that they are grouped into three primary types of plans: HMO, EPO and PPO plans.
• HMO stands for health maintenance organization.
• PPO stands for preferred provider organization.
• EPO stands for exclusive provider organization.
All these plans use a network of physicians, hospitals and other health care. The differ in how you are allowed to choose a doctor and schedule an appointment.
Under an HMO plan, you select primary care physician. All your health care services go through that physician. They are “gatekeepers”. The Primary Care physician decides whether you need care, and approves or declines a referral to a specialist. If your primary care doctor doesn’t make a referral, you are not covered to see a specialist. Primary Care physicians are often rewarded for managing “health care costs” – and are incentivized not to make more referrals than necessary. Visits to health care professionals outside of your network typically are not covered by your insurance without specific exceptional permission from the carrier. These exceptions are generally only granted if there is no one in the HMO’s network who can perform the service or procedure.
For example, if your child has a sports injury, you can’t go straight to an orthopedic surgeon. You would first go to your primary care physician, who‘d examine you. If your doctor can’t help you, she will give you a referral to a contracted dermatologist within your network
One exception to this is that women don’t need a referral for OB/GYN, appointments within their network for routine services such as annual well-woman visits, cancer screening, and obstetrical care.
Because HMO plans limit specialist care to visits approved by a primary care physician, many “unnecessary” care is avoided, and costs are lower for the carrier. These savings are passed on to policy holders in the form of lower premiums.
PPO plans are the most flexible plans. You can go to any health care professional you want without a referral. You choose who you want to see and how you want to be treated.
Choosing a doctor finside your network means smaller copays and full coverage. Doctor visits outside your network usually don’t count towards your standard deductible or out of pocket maxima Out of Network services have a separate deductible and out of pocket maximum. So you will generally be paying the full doctor’s bill out of pocket. On the plus side, if you have a major disaster – Cancer, surgery, hospitalization etc. and you rack up hundreds of thousands of dollars in health care services – everything above your out of pocket maximum will be covered by your carrier. If you are hospitalized, or receive complex care, you will find that even if the hospital is in your network that many of the specialists that will treat you are out of network and will be covered accordingly.
EPO plans are almost like PPO except that the network is exclusive. Instead of a separate deductible for out of network providers, there is just no coverage. If you have a major issue or hospitalization and rack up major expenses from out of network specialists – there will be no coverage. Those claims are your complete responsibility. In many cases a carrier’s EPO network is a narrow network with fewer doctors than their PPO network. In some cases, like Anthem of California, PPOs no longer are offered, they have all been replaced by EPO plans.