With so many acronyms flying around when it comes to describing health insurance, it’s easy to get confused. Below is a simple guide to what these acronyms stand for, and how you can better understand which type of plan is best for you.
What is HMO insurance?
Starting in the 1970s, the Health Maintenance Organization (HMO) began offering health coverage based on an in-house network of providers.
Essentially, what makes an HMO unique is that you start by choosing a primary care physician (PCP), usually a general practitioner. Everything else, outside of emergencies, goes through that doctor. For instance, if you develop a rash, first you visit your PCP and then get a referral to an in-network dermatologist.
With most HMO plans, health services for women such as a visit to the obstetrician or gynecologist is also provided without first needing to get a referral from your PCP.
HMO plans are usually the most comprehensive insurance plans today, as your doctor has a wider range of care specialists to which you can be referred for treatment. In general, HMO plans have a higher premium than EPO or PPO plans, but are quite popular because all of your healthcare is coordinated through a single individual.
Approximately 40% of insurance plans today are HMOs.
What is PPO insurance?
The acronym PPO stands for Preferred Provider Organization. Essentially, you choose a network of healthcare providers, usually a combination of general practitioners, hospitals, clinics, and specialists. Instead of having to go see your primary doctor first, instead you select the medical specialists you need directly. Therefore, if you develop a skin rash, you’d go visit an in-network dermatologist.
PPO plans often have a slightly higher premium than HMO plans, but are becoming increasingly popular because of the increased flexibility offered to participants. While there is certainly some cost savings that come with a PPO plan, it can be challenging to coordinate all of your healthcare needs through the insurance company rather than via your personal care physician.
Approximately 40% of insurance plans today are PPOs.
What is EPO insurance?
An Exclusive Provider Organization (EPO) is very similar to a PPO. You do not need to choose a primary care physician, and can go directly to the healthcare provider to suit your needs. Therefore, if you developed a skin rash, you could go directly to a dermatologist. What makes an EPO different than a PPO is that the network is far more restricted, but the out of pocket expenses for in-network treatment is usually far lower. Anything outside of an emergency won’t be covered, so you’ll have to pay full price for any treatment received by a doctor or hospital out of your EPO network. EPO plans often come with lower premiums than HMO or PPO plans, but this is offset by being restricted to a smaller network.
Partly because they are relatively new, only approximately 7% of insurance plans today are EPOs.
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