There are so many acronyms in the world of health insurance, and here at Granted, we are here to bring some clarity the alphabet soup.
When you’re picking your plan for the new year, you may see PPO, EPO, or HMO - but what do all of these mean?
All of these terms revolve around how your plan covers something based on the network status of your doctor or hospital. But what is network status?
Network status refers to whether or not your doctor has a contract with a specific insurance network. This contract would determine how much your doctor gets paid for any service that they provide. Your doctor and your insurance negotiate these costs before your plan begins. If your doctor has a contract with your network, they are considered in-network. If your doctor does not have a contract with your network, they are considered out-of-network.
Now let’s get into these acronyms.
PPO stands for Preferred Provider Organization. This means that if you go in-network, you will get significantly better coverage, but if you go out-of-network, you will still have some coverage. For example, if you see an in-network dermatologist, you might have a copay of $60, but if you see an out-of-network dermatologist, you might be reimbursed 70% of the cost after you’ve met your out-of-network deductible (which could be thousands of dollars).
EPO stands for Exclusive Provider Organization. This means that if you go in-network, you will be covered, but if you go out-of-network, you won’t be covered at all except in emergency situations. For example, if you see an in-network physical therapist, you might pay $30 per session, but if you see an out-of-network physical therapist, you would pay for the full cost of the session (which could be hundreds of dollars).
HMO stands for Health Maintenance Organization. These follow similar rules as an EPO - if you go in-network, you’re covered, and if you go out-of-network, you’re not. However they can come with additional restrictions. Most HMOs require you to see a primary care provider (PCP - another acronym!) to get a referral before seeing a specialist. If you don’t, you’re not covered, even if the specialist is in-network.
So which plan should you pick? Most of the time, the more restrictive plans (EPOs and HMOs) are less expensive per month, while the PPOs are more expensive. If you only see doctors who are in your plan’s network, EPOs and HMOs can be a good fit. If you need to see out-of-network doctors, and you want to be reimbursed for some of the costs, paying more every month might make more sense.
Still confused? Don’t worry, Granted is here to help! Create a case with one of our Healthcare Advocates and