Exclusive Provider Organizations (EPO)

Choosing an insurance plan may remind you a bit of alphabet soup. Do you get a PPO, HMO or EPO? What about a PSO? Maybe another string of letters would work even better? If you find your choices frustrating, you are not alone. In fact, some people stick with a PPO or HMO simply because they are used to that type of coverage and are afraid to change. Before you reject these other types of health insurance, you need to understand your options. For instance, the lesser-known EPO plans might be best for you and your family, offering you inexpensive premiums and quality health care.

EPO Basics

It's understandable if you haven't heard of an EPO plan, but it is a bit like an HMO option. Both EPOs and HMOs consist of networks of local providers that are under contract to the plan. Policyholders must go to these providers in order for their medical care to be covered. Unlike a PPO, there is no out-of-network coverage except in the case of emergencies. If you want to see a doctor not under contract to your EPO, you'll have to pay the entire cost by yourself. In this way, an EPO operates the same as an HMO. You get limited options but at a great price.

Primary Care Physicians

In some plans, like a PPO, you do not have to choose a primary care provider. You can go where you want when you want. An EPO requires that you do make a choice and that it is registered with the insurance company. A PCP is also known as a general practitioner, internist or family doctor. They are your "go to" physician for most health complaints. If your PCP leaves the EPO network, you will have to name a replacement in order to keep your coverage.

HMOs also require that you choose a PCP. Under those plan types, you have to get a referral from the PCP if you wish to see a specialist. An EPO plan does not require a referral. You are free to seek out the treatment you wish as long as the provider is in your network. This freedom is a plus for many who resent the need to seek permission to see a dermatologist, cardiologist or fertility specialist.

Out-of-Network Visits

Before choosing an EPO, you should consider your need for out-of-network providers. If your network providers are adequate to meet your treatment needs, then giving up out-of-network options is no big deal. If you have a chronic or acute disease, you may want to retain your option to go to a major medical center away from your local area. For instance, you will probably not be able to visit the Mayo Clinic and have your claims covered if you choose an EPO.

The out-of-network provision does not apply to emergency treatment. Of course, there will be times you are away from your local providers. If you need emergency treatment, you can get it and still have coverage. If you question whether your treatment will be considered an emergency, you should contact your insurance company to make certain. In a non-emergency situation, you would need the EPO's approval before receiving treatment. If you don't get it, your claim will be denied.

Your network may include a number of highly-trained specialists, or you may be in outstanding health. You need to take these factors into consideration before signing up for an EPO that will limit your choices.

Cost Benefits

Cost is the primary reason to choose an EPO. While you do sacrifice some provider choice, the cost of this type of policy is usually far less than a PPO. An EPO, like an HMO, reduces costs by establishing contracts with local providers. These physicians and facilities provide services for the EPO patients at a lower cost in order to get increased patient flow. They make more money while the EPO pays out less.

The policy holder also benefits by paying much lower premiums and deductibles. If you choose an EPO, you may well save thousands of dollars each year. EPOs and HMOs make it possible for people with limited finances to acquire health insurance coverage.

Your Options

If you get coverage through your employer, you may or may not have the option of an EPO. If you are buying your policy individually, perhaps through theHealthcare.gov marketplace, you will be able to compare the costs of a number of plans and plan types. You should always carefully compare premium costs as well as deductibles, copays and coinsurance. Some low-premium plans end up costing you more annually because these other costs are so high.

In general, an EPO will be one of the cheaper policies available to you. Before deciding on a policy, do carefully consider the physicians and facilities that are in the network. You do not want to be unpleasantly surprised by the plan's provider limitations.

Choosing an insurance plan always requires some guesswork. You cannot know how your health will be for the upcoming year. The provider limitations may not be an issue at all, or they could quickly become important. If you want to have the most options possible and are willing to pay for them, a PPO may be a better choice for you. On the other hand, if you are willing to deal with the restrictions to save money, then an EPO can be the best plan for your needs.