Many health insurance companies are shedding some of their plans such as PPOs (preferred provider organizations) and replacing them with EPOs (exclusive provider organizations) for next year, which do not provide consumers with out-of-network coverage.
Eliminating this option is just one of many changes occurring in health insurance plans this year as employers have shifted more of the cost of the premium to consumers and as deductibles are rising across all plans.
How PPOs Vary from EPOs
While EPO plans are hardly new, they are being “rolled out” by more health insurance companies than in the past, said Nate Purpura, vice president of consumer affairs at eHealth.com, an online health insurance exchange based in Mountain View, Calif. Only PPO plans will pay a portion for patients to undergo treatments in other networks, while an EPO will not cover anything.
EPO plans still remain far less common than PPO and HMO plans currently and EPO plans typically account for only 10% to 15% of all of the plans out there, he said. Through mid-November, eHealth reported a nearly 50% increase in the number of EPO plans being brought to market by the insurance companies for 2016 compared to 2015.
EPO plans are resonating with many consumers as well, because they share many similarities with both PPO and HMO plans. The EPO plans can be viewed as “something in between,” Purpura said.
“The early indications are that health insurance shoppers are more likely to choose an EPO plan this year compared to last year by a similar margin,” he said.
At first glance, the two plans seem strikingly similar, but if you need to see a specialist who is out of the insurance company’s network even once, you are liable for all costs. The cost of the visit and any tests will not count toward your deductible or your maximum out of pocket amount.
“With a PPO, going out of network means that you pay more, which is usually double or triple your in network rates, but the insurance company will still pay something,” said Jack Hooper, CEO of Take Command Health, an online health insurance exchange based in Dallas. “With an EPO, the insurance company will pay nothing. You’re on your own.”
Not all consumers will find this to be a sticking point if they are diligent about conducting research on which doctors are in their network and could see an added benefit of their monthly rates declining or stabilizing over the long-term, said Hooper.
“Insurance companies feel confident you’ll access their providers with their negotiated rates in an EPO,” he said.
The flexibility of not having to choose a primary care physician in EPO plans compare to HMOs which require it could be favorable for many consumers, said Purpura. These plans are less rigid and allow patients to see specialists and other doctors in the network without a referral.
PPO and EPO plans are similar in that they each have specific networks of providers and generally don’t require you to coordinate your care through a single primary physician. However, they differ in that PPO plans may sometimes offer you a diminished level of coverage when you see out-of-network providers.
When consumers are faced with having to go to the emergency room for an accident or injuries such as a broken leg, both EPO and PPO plans will provide coverage.
“It’s stuff like specialists and specialty clinics in non-emergency situations that you’ve got to watch out for,” Hooper said.
When PPOs Are a Good Option
Healthy consumers who rarely go to the doctor and do not have any serious health problems would benefit from signing up for an EPO plan, because their deductibles are likely to be less expensive, said Hooper.
“A smart insurance consumer who knows his or her doctor network will find EPOs are a great way to save a little bit on their premiums while a consumer who is used to just showing up for visits and then figuring out the bill later may be in for unpleasantly high bills when their EPO excludes their claims,” he said.
Patients with chronic issues such as severe back pain, diabetes or recurring sports injuries may need to see specialists more often if a diagnosis has not been determined, so choosing a PPO for one or two years might be more beneficial.
“If you regularly go outside your network, the difference between a PPO and an EPO could be a real problem,” Hooper said.