What is a Preferred Provider Organization (PPO)?
A PPO is a healthcare plan that establishes a network of healthcare providers for its members through contracts with doctors and hospitals. PPO members pay either a co-payment at the time of service or the full cost of the service until they meet a deductible. The insurance company may waive the deductible for preventive care or in-network care. PPO members pay a higher copay or cost share for going out of network and may be subject to a deductible which can increase the cost further.
What’s an Exclusive Provider Organization (EPO)?
An EPO also has a network of preferred healthcare providers similar to a PPO, except members, receive no reimbursement or benefit if they visit a healthcare provider outside the preferred network except in emergencies. EPOs suit individuals who need minimum care and want to save time and money. Members pay lower costs and do not need a referral to see a specialist. They cannot choose a provider outside the EPO network.
HMO vs. PPO Health Plans
HMO versus PPO Health Plans Both HMOs and PPOs are types of managed healthcare plans, but while patients have the flexibility to choose any physician whether in-network or out-of-network, HMOs restrict patients to physicians in their network. Patients on a PPO plan also pay higher costs if receiving care from an out-of-network provider. In an HMO plan, the patient must first see their primary care physician before being referred to a specialist and these specialists must be in-network. HMO plans are generally cheaper with no filing of claims required, while PPO plans have higher premiums with deductibles, coinsurance, or copays which require the filing of claims for reimbursement.
