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Health Insurance

What Is EPO Health Insurance? Everything You Need to Know

You have several options when choosing health insurance coverage, but as the most common health insurance network available through employers, an Exclusive Provider Organization (EPO) plan may offer greater value than other plans on the market.

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An EPO, or an Exclusive Provider Organization, is a health plan similar to an HMO or a PPO. An EPO plan offers patients a local group of hospitals and doctors within their network to choose from when seeking care. As long as the patient stays within the network, these plans are more cost-effective than the standard PPO plan. If the patient goes out of network, however, they’ll pay more out of pocket for health care services.

Understanding the Exclusive Provider Organization (EPO)

A network for a health insurance plan is a group of doctors, hospitals, and other healthcare facilities or providers with a contract with a particular insurance company. This allows the healthcare providers to be guaranteed a patient pool amongst the EPO insurer’s policyholders, and the insurer can offer lower healthcare rates from their network to attract more applicants. Overall, this means that patients pay less out of pocket for services they receive with the doctors that agree to be in their plan’s network.

EPOs keep their costs low by only offering care within their network, even if the only option is far away from where the patient lives and works. If a patient seeks care outside the EPO network, the patient is solely responsible for the bill. The only exception is if a patient seeks out-of-network care in an emergency. In an emergency, the EPO will cover services the patient receives at the in-network price. 

While a policyholder can see a specialist without a referral, they might need to clear the treatment with the insurance company before receiving care if they want to ensure it is covered. If the policyholder fails to get insurance approval for a test or service, the insurer could deny their claim, and the patient could end up paying the cost for the test or service out of pocket.

Primary care physicianNoNoYesYes
Out-of-network careMedical emergencies onlyYes, partially coveredNoYes, with limitations
Pre-approval for medical servicesYesYesYesYes

Do You Need a Primary Care Physician In an EPO?

Not always, no. While some plans mandate that all policyholders designate a specific physician as their primary care doctor, those with EPO insurance generally do not have to do so. A primary care physician is a doctor patients turn to for most of their health care needs. This physician is responsible for their patients’ annual check-ups and is usually their first visit if they need non-emergency medical attention. 

Can You Get Out-of-network Care In an EPO?

Yes, but it may be costly. If you go out of network for care with an EPO plan, you can expect to pay the entire bill for services. This is true even if the service sought is usually covered. For example, if you wanted to see a doctor about a persistent cough but went to an out-of-network doctor instead of your usual in-network doctor because the out-of-network doctor had an earlier opening, then your EPO plan would not cover that appointment.

An EPO will only pay for a patient’s out-of-network services if they need emergency or urgent care. The Affordable Care Act made it illegal for insurance companies to charge more for emergency care outside their network. This means that patients can receive emergency services from their nearest hospital at in-network rates instead of trying to determine in a crisis whether or not the facility is within network. However, keep in mind that insurers will only pay for services that they deem an emergency, and this definition can vary.

Do You Need Pre-approval for Procedures In an EPO?

No, you do not need pre-approval. EPO patients can see specialists without going through their primary care physician first. However, policyholders may require approval from the insurance company before receiving certain services. Pre-approval is usually required for major procedures, like surgery, MRI, hospital stays, and other costly care.

Insurance could deny payment for the services if the patient receives the more expensive services without securing pre-approval. Most often, in-network care providers can secure pre-approval on the patient’s behalf. Ultimately, it’s up to the patient to secure proper permission for services. 

What Are the Costs of an EPO?

The monthly premium for an EPO is typically somewhere between the costs of an HMO and a PPO. The average price for one 30-year-old person on an EPO plan is between $400 and $450 per month. The actual cost, however, depends on where the patient lives and their specific plan. 

A health insurance deductible is the portion of the health care costs the patient is responsible for before the insurance starts to pay. An EPO plan deductible is typically around $2,000 per person on the plan. This means someone with a $2,000 deductible must spend that amount on approved costs before their EPO kicks in to help cover health costs.

A copay is how much a patient pays upfront for doctor’s, urgent, or emergency room visits. Typically, a covered visit copay is between $35 and $125, depending on the plan and the type of doctor you are seeing. Copays typically do not count toward an annual deductible amount.

Another big part of overall health insurance costs is coinsurance. This is the portion of the covered services a patient is responsible for paying. Usually, coinsurance for covered services is between 20% and 40%, depending on the patient’s plan. As an example, suppose your coinsurance is 20%. This means that after you have met your deductible and have paid your copay, you would be responsible for paying 20% of the final medical bill. Your insurance would pay the remaining 80% of the costs.

Advantages of EPO Insurance

An EPO plan is considered the midway point between the PPO and HMO health care plans. A patient that likes aspects of both plans should consider an EPO as a compromise between both plans.

  • EPO plans do not require their patients to see primary care physicians, which could be helpful to younger patients who are relatively healthy but may need some specialist care, such as dermatology. 
  • Patients can see a specialist without a referral. Skipping the referral step can save the patient both time and money.
  • EPOs have lower premiums than PPOs.
  • Some EPOs have nationwide networks, which means patients can see a physician even while they travel.

Disadvantages of EPO Insurance

Like there are benefits to every plan, there are drawbacks as well. EPO drawbacks mainly have to do with the plan’s network restrictions.

  • Patients might have to switch from their primary care physicians if their current doctor is out of their EPO plan’s network.
  • EPOs highlight doctors and care facilities that are local to where the patient lives. If the patient does any traveling outside of the network’s reach and needs non-emergency medical care, they could have to pay for all of the services out of pocket.
  • Emergency care from an out-of-network facility is always covered at the in-network price. However, the EPO provider may still send the patient a bill if the patient received services that the company does not consider part of emergency care, such as any hospital recovery time after the emergency.
  • The patient is responsible for getting prior approval for expensive tests and services. If the patient receives the test or service before obtaining approval, the insurance provider could deny the claim, leaving the patient to pay out of pocket.

EPOs vs. Other Health Plan Types

EPOs are comparable to the average POS plan. The best plan for a patient depends on their needs, health history, and lifestyle.

EPOs vs. HMOs

HMO stands for Health Maintenance Organization. HMOs require patients to have a primary care physician to authorize the more costly procedures and surgeries. Patients with an EPO can receive specialty services without a referral from a primary care physician. They are, however, required to obtain permission from the insurance company before any major medical services. 

Similar to EPOs, HMOs require patients to stay within the network for the maximum insurance benefit. Also, similar to patients with EPOs, those with HMOs must select doctors, hospitals, and other healthcare facilities or providers within their network to benefit from their health insurance plan.

EPOs vs. PPOs 

PPO stands for Preferred Provider Organization. Patients with PPO coverage can use out-of-network doctors as well as in-network doctors, hospitals, and other healthcare facilities or providers for their care at little additional cost. Some PPO patients also enjoy lower deductibles and coinsurance for their plans than those with an EPO plan. PPO plans, however, are much more expensive than an EPO plan. 

Similar to EPO patients, PPO patients can see a specialist without getting a referral from a primary care physician. Both EPO and PPO patients have access to emergency services at the in-network rate regardless of whether they go to an in-network facility.

EPOs vs. POSs

POS stands for Point of Service. Patients with POS plans are required to have a primary care physician as a part of their plan. POS patients can receive care without paying a deductible for most plans. POS patients are also able to use out-of-network physicians with some coverage provided by their insurance company.

EPO and POS patients can expect similar prices for their monthly premiums. Both plans also require patients to pay a copay for their doctors and hospital visits.

EPOs vs. HSAs 

An HSA is a health savings account. Employers usually pair HSAs with a high deductible health plan, or an HDHP, to offer employees health coverage for a low monthly premium.

An HSA is an account that employees can deposit their cash. That cash can then be used to cover deductibles and other medical expenses. An HDHP can be an EPO, PPO, POS, or HMO, which means an HSA can be paired with any of these options.

To be eligible for an HSA, patients must enroll in an HDHP-style plan. Once registered, they can start depositing their pre-tax money for medical expenses. A benefit of this plan is that the funds roll over each year if there’s money left over in the account. The savings account also follows the policyholder if they switch jobs.

What to Consider When Buying an EPO Plan

When considering EPO plans, consider the cost, how much you travel per year, and how often you need to see specialists. Because most EPO networks are local to where you live, those who travel often may need help finding doctors within their network while on the road. However, EPOs can better fit within your budget than the more expensive PPO option.