HMO, PPO, EPO or POS? Choosing a managed care option

There are loads of elements to contemplate once you’re purchasing for particular person medical health insurance protection – from premiums to deductibles to on-exchange and off-exchange and ACA-compliant (or not). Should you’re procuring within the particular person medical health insurance market, you’ll positively be making a alternative of metallic tier.

And – no matter the place you store – you’re going to finish up making a choice a couple of sort of managed care that works greatest to your scenario. As you’re deciding on a well being plan – whether or not it’s ACA-compliant or not – you’ll discover that the plans are labeled as both an HMO, PPO, EPO, or POS.

These acronyms stand for Well being Upkeep Group, Most popular Supplier Group, Unique Supplier Group, and Level of Service. They’re classes of managed care, which is how nearly all trendy medical health insurance is organized.

(The choice is an indemnity plan, which doesn’t have a supplier community. Indemnity plans are virtually unprecedented in at present’s main medical medical health insurance market.)

Why do well being plans have managed care designations?

Managed care is a medical supply system that makes an attempt to handle the standard and price of medical providers that people obtain. Every sort of managed care limits, to various levels,

• the variety of suppliers from which a affected person can select,
• whether or not the affected person has to make use of a main care doctor, and
• whether or not out-of-network care is roofed below the plan.
• Some managed care plans try to enhance well being high quality, by emphasizing the prevention of illness.

Indemnity plans – standard earlier than the appearance of recent managed care plans – have been largely changed by managed care plans during the last a number of many years, and the overwhelming majority of privately insured People are in some type of managed care plan.

Even within the Medicaid and Medicare techniques, managed care is enjoying an more and more giant position: Greater than two-thirds of the People enrolled in Medicaid had been lined below personal Medicaid managed care plans as of 2019. And greater than 45% of Medicare beneficiaries had been enrolled in personal Medicare Benefit plans as of early 2022 – a proportion that has been steadily rising over the previous decade.

What’s the distinction between an HMO, PPO, EPO, and POS plan?

To a big diploma, the variations contain entry to suppliers. All HMO, PPO, EPO, and POS plans have networks of medical suppliers (medical doctors, hospitals, and many others.) which have a contract with the well being plan during which the provider agrees to just accept a negotiated worth for the providers they provide. Some plans will solely pay for non-emergency care for those who obtain care from an in-network supplier, whereas different plans could cowl among the invoice for those who see an out-of-network supplier.

You’ll typically see easy comparability charts that present the “guidelines” for the various kinds of managed care. In a nutshell, they’ll typically say that HMOs and POS plans require a referral from a main care physician with the intention to see a specialist, whereas PPOs and EPOs don’t, and that PPOs and POS plans cowl out-of-network care, whereas HMOs and EPOs don’t. They may also typically are inclined to say that HMOs have decrease premiums, decrease deductibles, and smaller supplier networks, whereas PPOs have increased premiums, increased deductibles, and broader networks.

In actuality, the traces are typically extra blurry, and a lot of these plan administration have developed over time. For instance, this POS plan from Blue Cross Blue Protect of North Carolina does not require a referral to see a specialist. Neither does this HMO from Friday Well being plans. And whereas it’s typically true that employer-sponsored HMOs are inclined to have decrease deductibles and premiums and probably smaller networks, that doesn’t maintain true within the particular person/household (self-purchased) market.

It’s typically true, nevertheless, that EPO and HMO plans won’t cowl out-of-network care except it’s an emergency, whereas PPO and POS plans will present some out-of-network protection. However the out-of-pocket prices for out-of-network care will usually be considerably increased than the out-of-pocket prices for in-network care. For instance, that POS plan from Blue Cross Blue Protect of NC has an in-network deductible of $8,700 for a single particular person, however an out-of-network deductible of $43,500. And this PPO, supplied by Ambetter in Oklahoma, has an in-network deductible of $8,600, however an out-of-network deductible of $20,000.

So though PPO and POS plans do typically “cowl” out-of-network care, you would possibly discover that you just solely get a profit from that in case your out-of-network prices are notably excessive. And it’s additionally frequent to see that plans with out-of-network protection don’t put any cap on complete out-of-pocket prices for out-of-network care.

(The ACA requires well being plans to cap out-of-pocket prices for important well being advantages obtained from an in-network supplier – the cap is $8,700 this yr – however there are not any limits on how excessive out-of-network prices might be, even when the plan gives out-of-network protection.)

Plans with decrease deductibles are definitely out there, though their premium prices are typically increased. However they may nonetheless are inclined to have a lot increased out-of-network deductibles. For instance, this Medica PPO has an in-network deductible of simply $750. However the out-of-network deductible is $9,900, and once more, there is no such thing as a cap on how excessive out-of-pocket prices might be for care acquired exterior the plan’s supplier community.

Must you take into account managed care designation?

If you’re purchasing for a medical health insurance plan – both by means of the medical health insurance market or off-exchange – there are lots of elements to bear in mind. (That is additionally true for those who’re deciding on from amongst choices supplied by your employer, though there are prone to be far fewer decisions in that case.) We’ve lined a few of them right here, and still have an in depth abstract of issues to bear in mind when deciding which metallic degree is best for you.

So ought to the HMO, PPO, EPO, or POS designation matter once you’re deciding on a plan? Possibly, nevertheless it’ll rely on the specifics of the plans which are out there to you and the protection particulars which are essential to you.

Basically, you’ll need to have a basic understanding of the various kinds of managed care, and perceive whether or not your alternative will embody any protection for out-of-network care (that’s typically solely out there on PPOs and POS plans). And also you’ll need to be sure to perceive whether or not your well being plan would require referrals from a main care supplier. However as described under, there are a number of factors to bear in mind as you’re evaluating plans.

Availability of managed care choices varies by location

First, it’s essential to notice that the provision of the assorted managed care choices differs fairly a bit from one space to a different. Basically, after we take a look at particular person/household plans out there by means of {the marketplace}, POS plans are very uncommon, and PPO plans are a lot much less frequent than HMOs and EPOs.

However in some areas (Wyoming and Alaska are examples), all the out there plans are PPOs. In different areas, the one out there plans are HMOs and EPOs, that means that there are not any choices that present protection for out-of-network care.

To provide you an thought of how this varies from one space to a different within the market, there are, as of 2022:

• 129 HMOs and 5 PPOs out there in Chicago
• Solely HMOs out there in Atlanta
• 127 EPOs and 66 HMOs out there in Orlando
• 84 EPOs and 80 HMOs out there in Dallas
• 3 HMOs and 24 PPOs out there in Billings, Montana
• 65 HMOs, 3 PPOs, and 10 POS plans out there in Raleigh, North Carolina
• 15 EPOs and 6 PPOs out there in Birmingham, Alabama
• 24 HMOs and 40 PPOs out there in Tulsa, Oklahoma
• 10 HMOs, 33 PPOs, and 33 EPOs out there in Minneapolis
• 25 HMOs, 5 EPOs, and 10 PPOs out there in Los Angeles

So the place you reside will decide which varieties of managed care plans can be found to you. As soon as you already know what’s out there, you’ll be able to definitely take the managed care designs into consideration.

4 managed care concerns

However there are a number of elements to bear in mind:

1. Be sure to perceive your plan’s protection of out-of-network care

Though a PPO or POS plan will “cowl” out-of-network care, it’s essential to grasp how that works. Concentrate on the deductible (which is prone to be fairly excessive) and the out-of-pocket publicity (which might be limitless).

Additionally pay attention to the truth that an out-of-network supplier can and can steadiness invoice you except it’s an emergency or an out-of-network supplier working at an in-network facility. (Right here’s how the No Surprises Act protects customers from shock steadiness payments in these conditions).

Because of this though your well being plan could pay for among the service (assuming you’ve met the out-of-network cost-sharing necessities), the supplier can invoice you for the portion of their fees that had been above the quantity the well being plan paid.

2. Narrowness of networks varies

All 4 varieties of managed care plans can have broad, slender, or mid-size supplier networks. Don’t assume something. As a substitute, you’ll need to actively examine the supplier networks of every plan you’re contemplating, to see whether or not your particular suppliers are in-network.

Should you don’t at present have any suppliers, it’s a good suggestion to see whether or not every plan you’re contemplating has in-network hospitals and medical workplaces that might be handy for those who ended up needing medical care.

3. Managed care is completely different within the particular person market

Particular person/household plans aren’t the identical as employer-sponsored plans, and that features the supplier networks and managed care guidelines. You’ll have had an employer-sponsored plan supplied or administered by a specific insurer, however don’t assume that particular person/household plans from that insurer can have the identical supplier community or managed care guidelines (for instance, whether or not or not a referral is required).

4. Referral necessities fluctuate

Though you could have heard that HMOs and POS plans require a referral from a main care doctor with the intention to see a specialist, that’s not essentially true. Once more, you’ll have to verify the specifics of the plans you’re contemplating. (And there are professionals and cons to referral necessities. On one hand, they imply an extra workplace go to, which provides to your prices. However alternatively, your PCP will help to make sure that you’re seeing the proper specialist, and may coordinate the care you obtain from a number of specialists.)

Referrals are typically confused with prior authorizations (pre-authorizations), however these are two completely different ideas. A referral comes from a main care doctor, whereas prior authorization must be obtained from the well being plan itself. Well being plans can set their very own guidelines when it comes to which providers require prior authorization. All 4 varieties of managed care plans — HMOs, PPOs, EPOs, and POS plans — can and do require prior authorization for numerous providers. However there’s loads of variation from one plan to a different when it comes to what providers want prior authorization.

So it’s essential to grasp your plan’s guidelines, and to make sure that your physician has your well being plan info in order that they’ll submit prior authorization requests in your behalf. And if unsure, it’s greatest to contact your well being plan earlier than a specific service is scheduled, to be sure to know whether or not prior authorization is important, and in that case, whether or not it has been granted.

An HSA isn’t a kind of managed care

Should you’ve learn this far, chances are you’ll be questioning why a well being financial savings account (HSA) isn’t listed right here. It’s frequent to see comparability charts that embody PPO, EPO, HMO, POS, and HSA (Well being Financial savings Account). That leads many customers to imagine that the HSA acronym is a type of managed care – nevertheless it’s not.

HSA-qualified high-deductible well being plans (HDHPs) enable enrollees to contribute pre-tax cash to an HSA (you can not contribute to an HSA except you’ve gotten lively protection below an HDHP). And HDHPs should conform to particular IRS guidelines. The IRS units minimal deductibles and most out-of-pocket limits (that are decrease than the utmost out-of-pocket limits that HHS units for different plans), and limits the providers that the plan will pay for earlier than the deductible is met.

Nonetheless, HDHPs might be PPOs, EPOs, HMOs, or POS plans. So that is an “and” situation, relatively than an “or” situation. An HDHP will additionally be both a PPO, HMO, EPO, or POS plan.

The HDHP designation implies that the plan conforms to the IRS guidelines for HSA-qualified plans. And the HMO, PPO, EPO, or POS designation describes the plan’s method to managed care.

Don’t hesitate to ask questions on your managed care choices

As all the time, you’ll be able to flip to a dealer or navigator for those who want help with the method of evaluating well being plans and choosing the one that may greatest meet your wants. Relying on once you’re making use of for protection, our information to open enrollment and our information to particular enrollment intervals will reply a lot of your questions.

Louise Norris is an particular person medical health insurance dealer who has been writing about medical health insurance and well being reform since 2006. She has written dozens of opinions and academic items concerning the Reasonably priced Care Act for healthinsurance.org. Her state well being change updates are commonly cited by media who cowl well being reform and by different medical health insurance specialists.