What’s the difference between an EPO and PPO?

EPO stands for exclusive provider organization. EPOs are managed-care health plans, so they’re more restrictive than traditional health insurance plans. The chief advantage to EPOs is that this coverage type often costs less than the PPO and other plan options. A disadvantage of EPOs is that members that must see an out-of-network provider have to pay all costs for these services with no reimbursement. Additionally, emergency services outside an EPO’s network may mean no coverage. Once you enroll in a plan, there are strict rules on what allows you to change it. In most cases, that doesn’t include sudden illness outside of the coverage area.

PPO stands for preferred provider organization. Members of PPOs can choose any physician, hospital, imaging facility, and pharmacy that’s contractually associated with the plan. However, some providers are out-of-network, which means they don’t have a contract or agreement to provide services at a lower cost. Nonetheless, some coverage is still available for these out-of-network costs, unlike the EPO, where it’s not an option.

An advantage of a PPO over an EPO is that out-of-network providers are available. Unlike the EPO, where members are strictly held to a more narrow selection of health care facilities, physicians, and pharmacies, the PPO allows some coverage for out-of-network providers. In cases where the plan has a significant number of in-network providers, members may have a generous amount of options for themselves and their family’s health care.

Of course, the PPO members will pay a higher premium for this option. Both an EPO and PPO may not require referrals for in-network and out-of-network services, which can offer significant time savings. When you’re sick and need to see a specialist, you don’t want paperwork to slow down your diagnosis and treatment.

With a PPO, members have access to out-of-network providers. A downside to this is that these expenses could be high and cost more than any reimbursement from the insurance carrier. Some people find that paying more prevents them from seeking medical treatment in the event of an illness or accident.

An advantage of PPO is flexibility and convenience. If there are several in-network providers, members can switch to an out-of-network provider and still have some coverage for the fees. Of course, if you have a large family or need help with special medical needs or chronic health conditions.

For example, for those that require frequent care, such as dialysis, you might want to opt for a PPO for the wider selection of providers. In addition, for some specialties, it’s often challenging to get a quick appointment. When you have more options, you might be able to cut the wait time from two months to one.

On the other hand, an EPO is a type of managed care health insurance coverage that saves money because it offers fewer options for members. However, limited access to providers can be costly if members are sick or injured and need immediate medical attention outside the network.

The rule differences between PPO and EPO managed care plans are simple—A PPO allows a wide range of options for providers and facilities at different rates. There are two tiers, in-network and out-of-network. You have access to both but pay more for the providers that are not within your plan’s network. An EPO is restrictive. Members can only use in-network providers. If you see an out-of-network provider, they need to pay instead of using their insurance coverage for it.

Eligible expenses are the same for both plans. You must stay within the network providers for the EPO and PPO for full coverage. A PPO offers more flexibility with limited coverage or reimbursement for out-of-network providers. An EPO is more restrictive, with less coverage or reimbursement for out-of-network providers.

For budget-friendly members, the cost of an EPO is typically lower than a PPO. However, it’s important to know that some EPOs are narrow networks and might not have in-network specialists close by. In that case, you might spend an hour or more traveling to these appointments. This extra expense might negate the cost savings from a narrower network.

Overall, both types of plan options cover standard medical services such as primary care, prescription drugs, preventative screenings, lab tests, and emergency room visits. Additionally, the EPO and PPO allow members to pick any in-network primary care physicians. However, a PPO might not require a primary doctor on file.

An EPO vs. PPO doesn’t mean one has better coverage than the other. Someone who has few health needs can save money with an EPO. At the same time, a family with a wide range of medical conditions is better served with a PPO in most cases.

The chief advantage of both EPO and PPO is that you decide which is best for you and your family. You can see all the in-network care providers before choosing the EPO. The same goes for the PPO. If one or more of your regular physicians aren’t available, you’ll need to decide if you’re willing to switch to a new doctor that’s in-network or pay out-of-pocket to see continuing seeing them.