What Are The Different Health Insurance Networks and How Do They Work?

January 12th, 2024

PPO, HMO, HMO-POS, EPO, PFFS, etc. Those acronyms are all different types of network used in the health insurance industry. However, knowing what each of them stands for and how they work can be a challenge. Here is a breakdown:

• Preferred Provider Organization (PPO)

  Plans that have a PPO network have a network of doctors and hospitals they work with. When you use the providers in network, you usually pay less for services. However, with a PPO network you can also see providers that are out of network, even for routine care. You usually have to pay more when you use out of network providers. You also don’t need to select a primary care physician and don’t need a referral to see a specialist.

  We usually recommend plans that have a PPO network for more flexibility on which doctor you can see and which hospitals you can go to.

• Health Maintenance Organization (HMO)

  An HMO network is similar to a PPO network, but is a bit more restrictive. Unlike PPO, you have to stay in network with an HMO plan. The only time you will be covered out of network will be in case of emergency. If you decide to go outside of the network for routine care, the plan will more than likely not cover your visit. You also usually need to select a primary care physician and need to get a referral to go see a specialist with an HMO plan. However, copays, co-insurances and Maximum Out Of Pocket (MOOP) costs are usually lower with an HMO plan compared to a PPO plan.

  If all your doctors are in network and keeping your cost low is the main factor, an HMO plan can be a good option.

• Health Maintenance Organization with Point-Of-Service (HMO-POS)

  HMO-POS plans are regular HMO plans, but the POS option allows members to see out of network providers for certain services, depending on the plan. The list of services you can get outside of the network is listed in the plan’s documents, as those services differ from one plan to another.

• Exclusive Provider Organization (EPO)

  EPO plans are the same as HMO plans, however members don’t usually need a referral to see a specialist.

  Medicare doesn’t usually have EPO plans, as they are more common in the Affordable Care Act (ACA) (also called Obamacare) marketplace.

• Private Fee-for-Service (PFFS)

  PFFS plans are similar to PPO plans, but if a member goes outside of the network, they need to confirm with the provider that they accept the plan, by requesting an advance organization determination (also called an advance coverage determination) from the plan. This is because the plan determines how much the the members pay and the providers gets paid, unlike other Medicare Advantage plans where Medicare makes those determinations.

PPO and HMO plans are usually the two options that are the most common with Medicare plans.

Please note that this is an overview of the different types of network available. Refer to your plan documents for more information about the network and potential limitations.

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