What is an HMO?
HMO stands for a Health Maintenance Organization. This was the first of these networks to come to be. At the time of their origin, most Health Insurance plans had no network of doctors, but paid out a set reimbursement to the provider/insured with the insured being responsible for any balanced billing charges (charges made by the provider above what the insurance reimbursement was set at). HMOs approached providers of all types to come together to be under one employer (and one roof in many cases) to handle all of their business details so they would only have to see patients. HMOs started offering plans that had some very specific rules, most of which stand today.
In order for HMO customers to utilize these plans, which cost much less than other network plans, you must see the assigned or chosen PCP (Primary Care Practitioner) to access any care but emergency care. If the primary doctor deems it necessary for you to see a specialist, you must receive a referral to the specialist of their choice. Without a referral, you are out of network and have no coverage at another provider or for any other services.
For the headache of the HMO rules, you are charged a lower premium and guaranteed to never have a balance bill in the network. The doctor referral system should nearly guarantee that you never go out of network as long as you follow the HMO rules. A new benefit of the ACA allows you to use out of network providers for emergency care but you may be balanced billed for care received by non network providers.
What is an EPO?
EPO stands for an Exclusive Provider Organization. EPOs are very similar to HMOs in that you only have access to in network providers. You have no coverage if you go outside of the network. EPOs are generally larger than HMO networks and do not have the referral requirement to see other in network providers or the requirement to choose a PCP up front.
What is a PPO?
PPO stands for a Preferred Provider Organization. PPOs have the most flexibility of these network choices. They allow you to choose any provider in the network, without choosing a PCP or referrals, and will even allow you to have coverage outside of the network (at a reduced benefit). PPOs are usually the largest of these networks.
Which network is right for me?
There is no one right answer for every situation. The biggest determination is if the doctor and/or hospital you choose to use is already a part of any of the networks. If you do not have a preferred doctor/hospital, you may be just as pleased with a narrow network plan as with a PPO. If needing to get a referral is unacceptable for you, an EPO is a great compromise of the HMO and PPO. As always, you must weigh the decision for your budget and situation. Employers can, in most cases, leave the choice up to the employee by offering multiple plan options.
Here is where your broker becomes very valuable to an employer. After they have helped you select the right insurance company, your broker can help you find plan options to fit multiple situations and budgets and will help with the headache of multiple plan options to be sure that your employees and HR staff are confident for the employee elections.