HMO, PPO, EPO, Or POS — What’s The Best Option?

Nurse's station at busy hospital

In 2017, Blue Shield will be the only insurance carrier in California to offer a PPO. Blue Cross offered PPOs in 2016, but next year they’ll convert the majority of their PPO plans to EPOs. By 2018, it’s likely that zero carriers will offer a PPO.

How do these changes impact you? Which plan should you choose? We’ll compare each plan type —HMO, PPO, EPO, and POS — to help you decide.

What’s An HMO?

A Health Maintenance Organization (HMO) includes a limited network of doctors, hospitals, and clinics in a fixed geographic location. Any covered services you receive within that network are pre-paid by your insurance provider.

HMOs have four major distinctions:

  1. HMOs have a small network of healthcare providers.
  2. HMOs don’t cover out-of-network services.
  3. HMOs are typically cheaper than other plans.
  4. With HMOs, you need to visit your primary care physician (PCP) before you can get a referral to see a specialist.

In short, HMOs limit your access to care. As long as you visit a doctor, hospital, or clinic within your HMO network, you’ll typically pay less in out-of-pocket costs.

What’s A PPO?

A Preferred Provider Organization (PPO) contracts with a network of healthcare providers that are covered by your insurance carrier. These doctors, hospitals, and clinics have agreed to charge a negotiated rate for covered medical services.

PPOs have four major distinctions:

  1. PPO networks typically include a larger pool of healthcare providers than HMO networks.
  2. PPOs partially cover out-of-network services.
  3. PPOs are typically more expensive.
  4. PPOs don’t require a physician referral.

In short, PPOs give you more flexibility. You have a wider network of doctors to choose from; and because you don’t need a referral, you can go straight to a specialist without seeing a PCP first.

What’s An EPO?

An Exclusive Provider Organization (EPO) is similar to a PPO it doesn’t require a referral from a PCP. However, unlike a PPO, you won’t be covered for out-of-network care (unless it’s an emergency).

What’s A POS?

A Point of Service (POS) plan is more of a PPO-HMO hybrid. Like an HMO, you pick a PCP, and you may need a referral to see a specialist. Like a PPO, you’ll have some coverage for out-of-network care – but you might have to pay for a greater percentage of these services than if you had a PPO.


Each plan is a trade-off between cost and flexibility. Do you want to pay less out-of-pocket but have a smaller network of doctors? Do you want to pay more but have greater flexibility in how you seek care? Do you want to see a specialist without needing a referral? Consider the factors that affect each plan’s value to you.


An HMO is typically the cheapest option because it limits which doctors and medical facilities you visit.


PPOs typically have the widest network of doctors.


PPOs and EPOs don’t require a referral to see a specialist. HMO – and sometimes POS plans — do require a referral.


Except for emergencies, EPOs and HMOs won’t cover out-of-network costs. PPO and POS plans partially cover costs for out-of-network services; however, it’s recommended that you stay in-network to receive the highest level of benefit from a PPO or POS.

Wait Time

Since HMOs have smaller networks and require a PCP referral, you’ll wait longer to see a specialist.

Preventive Care

All plans – HMO, PPO, EPO, and POS – include free preventive care. No matter which plan you choose, you won’t pay extra for annual checkups, immunizations, health screenings, women’s wellness services, and tests for diabetes, heart diseases, and sexually transmitted diseases. If you have kids, all plans include dental and vision benefits for dependents under 18.

Plan Changes In 2017

As we mentioned earlier, California’s major insurance carriers are phasing out PPO plans in favor of HMO and EPO plans. Why the transition? HMOs are less risky to insurance carriers. Since HMOs have smaller networks and place more restrictions on members, insurance carriers have more control over where and how often enrollees receive treatment.

The change in plan offerings also represents a shift toward managed care. In 2017, all enrollees in Covered California health plans – even those with PPOs and EPOs – must choose or be recommended to a PCP within 60 days of their coverage start date. This policy won’t affect HMO members, since they’re already required to have a PCP. It will, however, impact PPO and EPO members. While PPO and EPO members won’t need a referral to see a specialist, a PCP will give them a constant point of contact for their health concerns.

Shop For Plans Today

Whether you’re renewing, switching, or buying new coverage, it’s easy to enroll in a health plan. Just talk to an agent at Regency West Insurance Services. Regency West represents all insurance carriers on the California market. Our group of licensed agents will work with you one-on-one to find a plan — HMO, PPO, EPO, or PPO —that fits your needs. And best of all, service from Regency West is completely free. When it comes to finding the right coverage, a little (free) help goes a long way!