A managed care health plan called an exclusive provider organization, or EPO pays for services from a network of healthcare providers.
A health insurance plan known as an exclusive provider organization (EPO) only pays for services rendered by hospitals, physicians, and other healthcare providers in its network. Your insurance won’t typically pay for your medical costs if you seek treatment outside of the network, with the exception of emergencies.
What you need to know about EPOs, including how they function, their benefits and drawbacks, and how they stack up against the alternatives, is provided below.
Organizations that Provide Exclusive Services: Definition and Examples
A managed care health plan called an exclusive provider organization, or EPO pays for services from a network of healthcare providers. Except in cases of emergency care, it usually won’t contribute anything to the cost of out-of-network services.
It’s not always necessary to choose a primary care physician (PCP) and obtain referrals from them in order to see a specialist. EPOs also frequently provide premiums that are lower than the norm in exchange for higher deductibles.
One EPO that only covers care in a specific network is Aetna’s Elect Choice plan. You must choose a PCP and obtain recommendations for specialists. Although PCPs and referrals are not necessary, its Open Access Elect Choice plan is still an EPO with an exclusive network.
What Is the Purpose of an EPO?
As long as you use providers in the network, an EPO will pay for your medical expenses. But, similar to the majority of health insurance plans, there is some out-of-pocket expense for covered services. All of the expenses related to EPO plans are as follows:
Premiums: These are the recurring or yearly payments you need to keep your insurance coverage active.
Before your insurance plan covers any costs, you must pay a certain amount for your covered medical services each year. You typically only have to pay your copayment or coinsurance for covered care once your deductible has been met.
Coinsurance is a portion of covered expenses that you are still responsible for paying after reaching your deductible.
A copay is a set amount you might be required to pay for specific covered services, even if your deductible has already been met.
Your EPO covers all costs after you’ve spent this much on deductibles, copayments, and coinsurance.
Let’s use an EPO plan as an illustration. It has a $2,000 deductible, a $0 copay, an 80% coinsurance rate, and a $7,000 out-of-pocket maximum. After visiting the ER, you spend $10,000 on covered services, all of which are provided by companies in your network.
Your deductible would be met with a payment of $2,000, leaving you with $8,000 in additional costs. You would contribute 20% of that, or $1,600, with the insurance company paying the rest. You would spend $3,600 in total. You would reach your out-of-pocket maximum of $7,000 if you spent an additional $3,400 on covered medical services during that calendar year. The insurer would then cover all covered services for the remainder of the year at 100%.
Your out-of-pocket maximum is not affected by your monthly insurance premiums.
The Benefits and Drawbacks of EPO
- minimal monthly fees
- broad networks
- Plans are accessible without the need for primary care physicians or referrals.
- No outside coverage of the network
- Low monthly premiums: Although they are higher than those of health maintenance organizations (HMOs), EPO premiums are typically lower than those of preferred provider organizations (PPOs).
- Large networks: Compared to HMOs, they typically provide a greater variety of healthcare professionals.
- Plans available without PCPs or referrals: Although not all plans offer this, you can get an EPO that doesn’t require you to find a primary care physician or ask for referrals when you need to see a specialist.
- High deductibles are possible: an EPO may come with a higher annual deductible in exchange for lower premiums.
- You may not receive assistance from your insurer if you receive services from providers who are not part of the network of your EPO.
An EPO health plan covers the cost of services from a network of healthcare providers. However, unless an emergency arises, it won’t assist you in paying for any care you receive from physicians or hospitals outside of this network.
Maintenance of Health Organizations (HMOs)
Compared to other plans, HMOs frequently have low premiums, deductibles, and copays.
They provide you with a network of providers to select from and do not cover out-of-network services, just like EPOs. Before you can see a specialist, you must choose a PCP and obtain referrals.
PPO stands for Preferred Supplier Organization.
Compared to other types of health insurance policies, PPO health plans typically have higher premiums. While they permit you to visit doctors and specialists outside of your network without a referral, copays and coinsurance costs for providers in their networks may be minimal.
Service point (POS)
The ability to receive care from providers outside of your network is provided by POS health plans, but it is more expensive than in-network care.
You must select a primary care physician (PCP) and request referrals for specialist visits.
- EPO plans provide coverage for services from the providers in your network, but they rarely provide coverage for care received elsewhere (except for emergencies).
- An EPO plan typically has premiums that are higher than those of an HMO but lower than those of a PPO or POS.
- There is some EPOs available that do not require you to see a primary care physician or a referral before seeing a specialist, but not all plans do.