Choosing a health care plan is an important decision that is confusing for lots of people. The U.S. Bureau of Labor Statistics website lists HMOs, EPOs and PPOs as three health care options belonging to a larger catalog of plan types. Knowing the benefits and drawbacks of each type can help you choose the plan that most closely matches your own specific health care needs and those of others who may be included in your plan.
The confusion about health care options is exacerbated by the use of acronyms such as HMO, EPO and PPO. An HMO is a Health Maintenance Organization, an EPO is an Exclusive Provider Organization and a PPO is a Preferred Provider Organization. Each type connects different combinations of patients, physicians, pharmacists, hospitals, labs and so forth into a network whose main advantage to the consumer is that it lowers health care costs.
Health Maintenance Organization (HMO)
The Bureau of Labor Statistics website lists four distinct types of HMOs, each of which will operate slightly differently. Generally, however, according to the NYC Better Business Bureau’s website, HMO network patients pay a fixed monthly fee and consult with a primary care physician (sometimes called a "gatekeeper") who may then either recommend treatment options or refer the patient to a specialist.
Preferred Provider Organization (PPO)
PPOs allow patients to select any physician within the network (without first seeing a primary care physician), but patients must pay the upfront cost of medical treatment and then request reimbursement. Unlike HMOs, PPO patients have the option to consult with a physician outside the network for an increased percentage or share of cost.
Exclusive Provider Organization (EPO)
An EPO is a type of Preferred Provider Organization (PPO) that restricts patients to selecting physicians within the network in order to qualify for plan benefits.
According to the NYC Better Business Bureau, restricting the decision regarding a specialist to the judgment of a primary care physician increases cost-saving benefits but reduces your ability to make your own health care choices. Because policies and benefits vary between plans, it is important to ask questions and weigh benefits specific to your own health care and financial situation before choosing one. Don’t neglect to include in your consideration of cost any restrictions and other cost-saving devices that may actually lower the value of any monetary savings you may be contemplating.