An exclusive provider organization (EPO) is a type of health insurance plan that only covers the cost of services from doctors, specialists, and hospitals in its network. If you go outside the network for care, your insurance usually won’t cover your medical expenses, except in emergencies.
Here’s what you should know about EPOs, including how they work, their advantages and disadvantages, and how they compare to the alternatives.
Definition and Examples of Exclusive Provider Organizations
An exclusive provider organization, or EPO, is a managed care health plan that covers the cost of services from a network of care providers. It typically won’t contribute anything toward the cost of out-of-network services unless they’re for emergency care.
You may need to select a primary care physician (PCP) and get referrals from them to see specialists, but they’re not always required. EPOs also tend to offer lower than average premiums in exchange for higher deductibles.
- Acronym: EPO
For example, Aetna’s Elect Choice plan is an EPO that covers care within an exclusive network. It requires you to select a PCP and get referrals for specialists. Its Open Access Elect Choice plan is also an EPO with an exclusive network, but PCPs and referrals aren’t required.
How an EPO Works
An EPO covers your healthcare costs as long as you use providers that are within the network. However, like most health insurance plans, you have to pay something out of pocket for covered services. These are all the costs associated with EPO plans:
- Premiums: These are the monthly or annual payments you must make to maintain your insurance coverage.
- Deductibles: Your deductible is the amount you must pay for your covered healthcare services each year before your insurance plan will help with costs. Once you reach your deductible, you’ll usually only have to pay your copayment or coinsurance for covered care.
- Coinsurance: Coinsurance is a percentage of covered costs you have to pay even after meeting your deductible.
- Copays: These are fixed payments you may have to make for some covered services, even if you’ve met your deductible already.
- Out-of-pocket maximum: Once you spend this amount on deductibles, copayments, and coinsurance, your EPO pays 100% of covered costs.
For example, let’s say you have an EPO plan with a $2,000 deductible, $0 copay, 80% coinsurance, and a $7,000 out-of-pocket maximum. You incur $10,000 in covered services after a trip to the ER, all of which comes from providers within your network.
You’d pay $2,000 to meet your deductible, leaving you with $8,000 of additional expenses. Of that amount, you’d pay 20% in coinsurance, or $1,600, with the insurer covering the remainder. In total, you’d pay $3,600. If you spend an additional $3,400 on covered medical services that year, you’d hit your out-of-pocket maximum of $7,000. At this point, the insurer would pay 100% of covered services for the rest of the year.
Monthly insurance premiums don’t count toward your out-of-pocket maximum.
Pros and Cons of an EPO
Low monthly premiums
Plans available with no primary care physicians or referrals necessary
May have high deductibles
No coverage outside of network
- Low monthly premiums: EPOs tend to have lower premiums than Preferred Provider Organizations (PPOs), though they’re higher than Health Maintenance Organization (HMO) premiums.
- Large networks: They generally offer a wider selection of care providers than HMOs.
- Plans available with no PCPs or referrals: You can get an EPO that doesn’t require you to get a primary care physician or ask for referrals when you need to see a specialist, though not every plan offers this.
- May have high deductibles: In exchange for lower premiums, you may pay more in annual deductibles with an EPO.
- No coverage outside of the network: If you receive services from providers that aren’t in your EPO’s network, you may get no assistance from your insurer.
EPO vs. HMO vs. PPO vs. POS
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An EPO health plan covers the cost of services from a network of care providers, but it won’t help you pay for any care you get from doctors or hospitals outside of it except in emergencies.
Health Maintenance Organization (HMO)
HMOs tend to have low premiums, deductibles, and copays relative to other plans. Like EPOs, they offer you a network of providers to choose from and don’t cover out-of-network services. However, you’ll have to select a PCP and get referrals before you can see a specialist.
Preferred Provider Organization (PPO)
PPO health plans usually have higher premiums than other types of health insurance policies. However, copays and coinsurance costs for providers in their networks may be low, and they let you see doctors and specialists outside your network without a referral.
Point of Service (POS)
POS health plans offer the flexibility to get service from providers outside your network, but it costs more than in-network care. You have to select a PCP and get referrals to see specialists.
- EPO plans cover services from the providers in your network, but you won’t typically get coverage for care outside of it (except for emergencies).
- You’ll usually pay more in premiums for an EPO plan than you would for an HMO but less than you would with a PPO or POS.
- You can get an EPO that doesn’t require you to get a primary care physician or ask for a referral to see a specialist, but not every plan offers this.