Skip to main content

What’s the difference between a PPO, EPO, POS and HMO?

If you’re shopping for health insurance, you might be overwhelmed by all the acronyms you see. What do they all mean for you and your coverage? Learn more.

Whether you just got a new job, recently quit your job or work for yourself, you may be on the hunt for a health insurance plan. And let’s face it: Shopping for health insurance can be really confusing and overwhelming.

You might feel like you need to be a health care expert to understand it all. For example, in one insurer’s brochure you might see all of these acronyms: HMO (Health Maintenance Organization), PPO (Preferred Provider Organization), EPO (Exclusive Provider Organization) and POS (Point of Service).

Here’s our guide on how to better understand this health care alphabet soup — plus, some information about what the best plan might be for you.

Want to get a jump start? Explore your health insurance options now, or contact a licensed insurance agent at 1-844-211-7730 to further discuss the available plans.

What is an HMO network, and why might it be the right choice?

HMO stands for “Health Maintenance Organization.” That’s a type of health plan that limits coverage to care from doctors who work for or contract with the HMO.

You’ll choose a primary care physician (PCP), who will coordinate your care. You usually need to get a referral from your PCP to see a specialist, notes Adria Gross CEO of MedWise Insurance Advocacy in Monroe, New York.

HMOs may also require that you get preapproval before covering certain medical services. You may also have to live or work in the HMO’s service area to receive coverage.

Pros: Some of the benefits of an HMO include their focus on the following:

  • Collaboration between your doctors
  • Prevention
  • Wellness

Also, an HMO’s monthly bills (premiums) can be lower, paired with a low (or no) deductible. That’s the amount you pay out of pocket before your insurance begins to pay toward your health care costs.

Cons: You may not be covered outside your HMO network — unless it’s an emergency or there are no specialists in your network that fit your medically necessary need. That’s according to Michael Orefice, senior vice president of operations at in Newport Beach, California.

What is a PPO network, and why might it be the right choice?

PPO stands for “Preferred Provider Organization.” It’s a type of health insurance plan where you can use either in-network or out-of-network services. You may pay less if you use providers in the plan’s network. But you can also use doctors, hospitals and providers outside of the network without a referral, for an additional cost.

Pros: With a PPO plan, you have flexibility to see the doctors that work for you, says Gross. There’s also no need for a referral from your primary care physician to see a specialist.

Cons: You’ll pay more for the flexibility. Your monthly insurance bill and out-of-pocket costs will be higher with a PPO than with an HMO or EPO plan, says Orefice. (For more on EPOs, see below.) And since you have more freedom to choose where to go and whom to see, you may also have to get more preapprovals for medical services.

What is an EPO network, and why might it be the right choice?

EPO stands for “Exclusive Provider Organization.” That’s a managed care plan where your insurance only covers health care services if you use doctors, specialists or hospitals in the plan’s network (except in an emergency). The cost of an EPO plan is generally lower than a PPO plan but higher than an HMO plan, notes Orefice.

Pros: With an EPO, you don’t need to have a PCP or referral to see a specialist. And you can generally see any provider if you stay in the network.

Cons: Generally, EPOs don’t have out-of-network benefits. “You will usually need to pay out of pocket whenever you receive services outside your EPO network,” says Orefice. Over time, those costs can add up. And since the plan doesn’t require you to have a PCP, you may be required to get more preapprovals for certain health care services.

Have questions about whether an EPO plan is right for you? Get more details now, or call a licensed insurance agent at 1-844-211-7730 to discuss your options.

What is a POS network, and why might it be the right choice?

POS stands for “Point of Service.” It’s a type of plan where you pay less if you use doctors, hospitals and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your PCP to see a specialist.

“A POS plan is a hybrid of HMO and PPO plans,” explains Orefice. Like with an HMO, your in-network physician must be your PCP. But as with a PPO, you can go outside of the plan’s provider network for health care services for an additional cost (the exception is if your PCP has made a referral to the out-of-network provider).

Pros: “POS plans can be up to 50% cheaper than PPO plans,” says Gross. But like with a PPO plan, you have the option to go out of the network.

Cons: With POS plans, you’ll find that your monthly insurance bill can be as much as 50% more than it would be with an HMO, notes Gross. And like with an HMO, you must have a PCP who coordinates your care. That means they have to provide referrals for you to see a specialist (or for you to go out of the network to see one).

Which type of health network is right for me?

Not sure which network to choose when shopping for health insurance? Here are some things to keep in mind:

Are all your medical providers already in the network? If so, an HMO or EPO plan may mean lower costs for you each month, suggests Gross. Just keep in mind that if you do decide to go out of the network, you’ll most likely have to shoulder the entire cost.

Do you need to go out of the network? If that is the case, you’re better off with a PPO or a more flexible POS, says Gross.

Regardless, it’s a good idea to pick a health insurance plan where most of your medical providers and services are in the network. That way, you’ll only have to go out of your plan’s network occasionally, if at all. Your wallet will thank you.

Looking for a health plan and network of providers that’s right for you? Learn more now, or call a licensed insurance agent at 1-844-211-7730 to discuss your health insurance options.

Compliance code:

Visit the Optum Store to make the most of your FSA/HSA account

Get care
Get care
Fill Rx
Fill Rx