What are HMO, PPO, EPO, POS and HDHP health insurance plans?

If you have health insurance or are even just shopping for coverage, you have likely come across the term “network” or “provider network.” You may have seen acronyms like HMO, PPO, EPO, POS or HDHP — but it may not be completely clear how choosing one over the other changes access to medical care and may affect out-of-pocket costs.

Which insurance is most affordable? Which health insurance plan is right for you? For a lot of people who get their health insurance through their employer, it comes down to what options are available if there's more than one choice.

Frequently asked questions about health plans

Explore these common questions to learn more about the different types of health plans and how they work.

What are HMO, PPO, EPO, POS and HDHP plans?

These are common acronyms for different types of plans. Let’s go over what they mean.

• HMO stands for health maintenance organization. This is named for the overall goal of this kind of plan — which is to help maintain your health.
• PPO stands for preferred provider organization. The name refers to its network of contracted PPO providers. With this type of plan, there are preferred providers who can offer care at the lowest out-of-pocket cost (compared to out-of-network providers).
• EPO stands for exclusive provider organization. This refers to the rule of this type of plan that requires members to get care within the plan’s network of select providers. If you get care outside the EPO network, you’ll likely have to pay the full cost of that visit.
• POS stands for a point-of-service plan. With this type of plan, each time you need health care (the time or “point” of service), you can decide to choose network care and allow your primary care physician to manage your care, or you can decide to go outside of the network and seek care from a doctor of your choosing.
• HDHP stands for high deductible health plan. It’s a type of health insurance plan that offers lower premiums in exchange for higher out-of-pocket costs. With HDHPs, you’ll pay less each month, but more when you get care compared to other health plans.

What are provider networks?

A network can be made up of doctors, hospitals and other health care providers and facilities that have agreed to offer negotiated rates for services to insureds of certain medical insurance plans.

Why do health insurance companies provide access to networks?

Networks are generally developed to help keep costs down for both you, the customer using the medical insurance plan, and the insurance company itself. By negotiating rates for services, the insurance company can keep its costs down and may offer you lower out-of-pocket costs.

What are the different kinds of networks?

There are four basic kinds of networks you need to know: HMO, PPO, EPO and POS. It’s helpful to compare them in a few key categories.

Note: While we’re using common terms and definitions here, be aware that terms and definitions may vary by insurance company.

Which network should I pick?

Everyone is looking for something slightly different out of their health insurance, so this is really a question you have to answer for yourself. But there are a few pointers you can keep in mind:

• Before you start looking, make note of your “need to haves” and “want to haves” in terms of your provider network and benefits. Also, list any doctors or hospitals you want access to. Keep that information at hand while you shop.
• Check the networks you’re considering for doctors, hospitals and pharmacies near to you before making any decisions, especially if easy access to care is important.
• If your doctor’s already in-network, or you’re flexible about where you get care and can easily stay in-network, then choosing an HMO or EPO may mean a lower cost for you each month.
• If you need the freedom to go outside a narrow network and still get some benefits from your coverage, then look at PPOs or a more flexible POS plan.

Compare HMO, PPO, EPO and POS plans

POS plans usually require you to get referrals to see specialists. Most plans will have some coverage for out-of-network care — often with a higher copay.

These plans are like a combination of an HMO and PPO plan.

Providers or doctors either work for the HMO or contract for set rates.

Doctors and facilities that participate in an EPO are paid per service. They don’t directly work for or contract with the EPO carrier for a set rate. Instead, they have negotiated lower rates on services they perform for plan members.

Network providers have negotiated rates on medical services for members with a POS health plan.

May restrict your coverage to care in the plan network.

Out-of-network coverage may only be available for emergencies.

Coverage is generally for care in the plan network for services.

Out-of-network services may be authorized in limited cases. Benefits and coverage for out-of-network care may be less than if you stay in the plan network.

Almost every network requires preapprovals for some medical services. Because a PPO plan gives more freedom to choose your preferred providers, you may need to get more preapprovals.

Preapprovals are more likely needed before having certain health care services, because you’re not required to have a PCP overseeing your care.

Some health care services will need preapproval. However, if you have A PCP, they will often take care of preapprovals for you.