PPO vs HMO vs EPO: How Health Plan Networks Differ

The letters on a health plan describe its network: which providers you can use, whether you need a referral, and what happens if you go outside the network. They also have a big effect on price.

This is general information. Every plan's rules are in its own documents, so check the plan you are considering.

PPO: preferred provider organization

A PPO has a network of providers who agree to set prices. You can usually see in-network providers, including specialists, without a referral. Many PPO plans also pay part of the cost when you go outside the network, although you pay more and may be billed the difference. PPOs usually cost more each month than HMOs in exchange for that flexibility.

HMO: health maintenance organization

An HMO usually asks you to choose a primary care provider who coordinates your care and gives referrals to specialists. Except in emergencies, care outside the network is generally not covered. HMOs often have lower premiums and simpler costs, but the network is usually smaller and more local.

EPO: exclusive provider organization

An EPO sits in the middle. Like a PPO, you usually do not need referrals. Like an HMO, care outside the network is generally not covered except in emergencies. Premiums are often between HMO and PPO levels.

POS: point of service

A POS plan mixes the two. You usually choose a primary care provider and need referrals, but some out-of-network care is covered at a higher cost.

Side by side

Plan type	Referrals for specialists	Out-of-network coverage	Typical premium
PPO	Usually not needed	Often partial	Higher
HMO	Usually needed	Generally none except emergencies	Lower
EPO	Usually not needed	Generally none except emergencies	Middle
POS	Usually needed	Often partial	Middle

Questions to ask before you choose

• Are the providers I use in this plan's network?
• Is the network regional or national? This matters if you travel, work in more than one state or split time between homes.
• What do I pay out of network, and is there a separate out-of-network deductible?
• What are the premium, deductible and out-of-pocket maximum together?

Where private PPO plans fit

Many private plans are built on PPO networks, and some use national networks that travel with you. If network freedom matters to you, a PPO is often worth the higher premium. Compare a few plan designs side by side to find the right balance. You can see an estimate, read how PPO networks work, or talk to a licensed agent.