You may need to select a primary care physician (PCP) and get referrals from them to see specialists, but they’re not always required. EPOs also tend to offer lower-than-average premiums in exchange for higher deductibles. An EPO covers your health care costs as long as you use providers within the network. However, like most health insurance plans, you have to pay something out of pocket for covered services. These are all the costs associated with EPO plans:
Premiums: These are the monthly or annual payments you must make to maintain your insurance coverage. Deductibles: Your deductible is the amount you must pay for your covered health care services each year before your insurance plan will help with costs. Once you reach your deductible, you’ll usually only have to pay your copayment or coinsurance for covered care. Coinsurance: Coinsurance is a percentage of covered costs you must pay even after meeting your deductible. Copays: These are fixed payments you may have to make for some covered services, even if you’ve met your deductible already. Out-of-pocket maximum: Once you spend this amount on deductibles, copayments, and coinsurance, your EPO pays 100% of covered costs.
Example of an EPO
Let’s say you have an EPO plan with a $2,000 deductible, $0 copay, 80% coinsurance, and a $7,000 out-of-pocket maximum. You incur $10,000 in covered services after a trip to the ER, all of which comes from providers within your network. You’d pay $2,000 to meet your deductible, leaving you with $8,000 of additional expenses. Of that amount, you’d pay 20% in coinsurance, or $1,600, with the insurer covering the remainder. In total, you’d pay $3,600. If you spend an additional $3,400 on covered medical services that year, you’d hit your out-of-pocket maximum of $7,000. At this point, the insurer would pay 100% of covered services for the rest of the year.
Pros and Cons of an EPO
Pros Explained
Low monthly premiums: EPOs tend to have lower premiums than Preferred Provider Organizations (PPOs), though they’re higher than Health Maintenance Organization (HMO) premiums.Large networks: They generally offer a wider selection of care providers than HMOs.Plans available with no PCPs or referrals: You can get an EPO that doesn’t require you to get a primary care physician or ask for referrals when you need to see a specialist, though not every plan offers this.
Cons Explained
May have high deductibles: In exchange for lower premiums, you may pay more in annual deductibles with an EPO.No coverage outside of the network: If you receive services from providers that aren’t in your EPO’s network, you may get no assistance from your insurer.
EPO vs. HMO vs. PPO vs. POS
Health Maintenance Organization (HMO)
HMOs tend to have low premiums, deductibles, and copays relative to other plans. Like EPOs, they offer you a network of providers to choose from and don’t cover out-of-network services. However, you’ll have to select a PCP and get referrals before you can see a specialist.
Preferred Provider Organization (PPO)
PPO health plans usually have higher premiums than other types of health insurance policies. However, copays and coinsurance costs for providers in their networks may be low, and they let you see doctors and specialists outside your network without a referral.
Point of Service (POS)
POS health plans offer the flexibility to get service from providers outside your network, but it costs more than in-network care. You have to select a PCP and get referrals to see specialists.
