Health insurance plans are often based on a network of doctors and other health care providers. Different plan types offer different levels of access to providers outside of a plan’s network. Below are some terms and their acronyms in an effort to help you understand them.
Health Maintenance Organization (HMO) – HMOs have networks of doctors, specialists, pharmacies, and labs. You must stay within the network of your HMO to receive the care you need. You must choose a Primary Care Physician (PCP), who is the person responsible for the coordination of your care. Your PCP must give you a referral to see an in-network specialist. You cannot go out-of-network to get care unless your plan approves it ahead of time, and approvals are often granted only if there is no in-network qualified provider in your area.
Preferred Provider Organization (PPO) – In a PPO, you have more provider choice since you may receive services in- or out-of-network. You also do not need a referral to see a specialist. Most PPOs cover 70-80% of out of network costs, but the amount paid is based on how much the plan would pay a doctor in its own network. The unpaid amount is called co-insurance. Doctors outside of the PPO’s network can charge whatever they like for your care, so this is important to discuss before receiving services. Also, be sure to check your plan documents so that you are aware of your co-insurance and benefits if you choose to go out-of-network.
Point of Service (POS) – The POS plan is like a combination of the HMO and PPO plans. You are required to designate an in-network physician to be your primary health care provider. You may go out-of-network if you choose but in doing so, you will have to pay most of the cost yourself. The one exception to this rule occurs when your primary care physician refers you to a specific out-of-network doctor, in which case, the health plan will pay all or most of your bill.
Exclusive Provider Organizations (EPO) – EPO plans function similarly to HMOs, except that you cannot go out-of-network under any circumstances. There are no out-of-network benefits. You must receive all of your care within the plan’s network. Unlike an HMO, you do not need to select a PCP, nor do you need to contact your PCP for referrals to specialists. However, because you are responsible for choosing specialists and hospitals, it is especially important to check that your selected health care providers are in the network by calling the health plan or referring to its website.
In our next post, we will discuss payment structures for health care plans.