New York City employee health plans tend to follow common structures in terms of pooling risk and paying out claims. The two most common structures for providing healthcare are HMOs and PPOs, both of which provide different types of choices for obtaining healthcare. The following is a look at both, their differences, and how to decide which one to pick.
Health insurance policies for employers and employees in NYC tend to follow common structures in terms of how they pool risk and pay out claims. The four most common structures for providing healthcare are HMOs, EPOs, PPOs, and POS plans, each of which offers different levels of flexibility and choice in obtaining healthcare. Below is a look at all four, their differences, and how to decide which one to pick.
What Are HMOs, EPOs, PPOs, and POS Plans? A Quick Overview
You have most likely come across the initials HMO, EPO, PPO, or POS at some point while reviewing your medical insurance policy. Each of these acronyms represents a different type of health insurance plan, and they have different implications for your healthcare choices.
- HMO (Health Maintenance Organization): An HMO is a network of physicians that are contracted to provide healthcare according to the insurance policy. In an HMO, you must choose a primary care provider (PCP) from within the network and typically need a referral from your PCP to see specialists. Out-of-network care is not covered except in emergencies, but HMOs tend to have lower premiums and out-of-pocket costs.
- EPO (Exclusive Provider Organization): Like an HMO, an EPO requires you to stay within a network of healthcare providers. However, an EPO does not require you to choose a PCP or get referrals to see specialists. Out-of-network care is not covered, except in emergencies, but EPOs often offer more flexibility than HMOs while keeping costs relatively low.
- PPO (Preferred Provider Organization): A PPO allows you to see any physician, whether in or out of the network, without a referral. Although out-of-network care is more expensive, PPOs offer the most freedom in choosing healthcare providers. However, this flexibility comes at a higher cost in terms of premiums and out-of-pocket expenses.
- POS (Point of Service Plan): A POS plan combines elements of both HMOs and PPOs. You must choose a PCP who coordinates your care and gives referrals, like in an HMO, but you have the option to go out of network, similar to a PPO. While out-of-network services will have higher costs, POS plans offer more flexibility than an HMO while still controlling costs better than a PPO.
Key Differences Between HMOs, EPOs, PPOs, and POS Plans
- HMO vs. EPO: Both plans require you to use in-network providers, but the key difference is that EPOs don’t require you to select a PCP or obtain referrals to see specialists. However, neither plan covers out-of-network care except in emergencies, and both tend to be less expensive than PPOs or POS plans.
- PPO vs. POS: PPOs allow you to see any provider without a referral and cover out-of-network care at a higher cost. POS plans require you to pick a PCP and get referrals, but they give you the option to go out of network, combining the structure of an HMO with some of the flexibility of a PPO.
- Costs and Network Size: HMOs and EPOs generally have smaller networks and lower premiums compared to PPOs and POS plans. PPOs tend to be the most expensive due to their larger networks and fewer restrictions, while POS plans balance costs and flexibility by combining elements of both HMO and PPO structures.
Flexibility and Choice: Which Plan Offers More Freedom?
When it comes to flexibility, PPOs and POS plans offer the most freedom because they allow out-of-network care, though PPOs don’t require referrals. HMOs and EPOs, by contrast, limit your options to in-network providers and offer lower costs. If you want to keep seeing your current physician, it’s crucial to check if they are part of your selected plan’s network.
Your decision will largely depend on whether the extra flexibility of a PPO or POS plan justifies the higher costs for you or if the more affordable HMO or EPO can sufficiently meet your needs.
Choosing the Right Plan for Your Healthcare Needs
Depending on how you obtain health insurance, you may or may not have the choice to select an HMO or a PPO. Company health insurance in NYC tends to be picked based on costs and benefits, which means your employer may opt for an HMO over a PPO.
In the event you’re self-employed or have the option to get your own health insurance policy, you should do a close comparison of both HMO and PPO coverage to make sure it’s the right choice for your needs. Ask yourself what you need to get out of a health insurance policy in terms of medical care coverage and make your decision based on the type of network that most closely fits your needs.
Margolis & Associates’ Guide to Navigating Health Insurance Options
At Margolis & Associates, we’re a top insurance broker in NYC, and we’re here to help individuals and companies get the right health insurance coverage for their needs. Contact us today to talk to an agent about the kind of insurance you’re seeking. We’ll find you multiple quotes, explain how the policies work, and answer your questions so you get the best insurance policy that’s available.