Difference Between HMO and EPO Health Plans

Health Maintenance Organization (HMO) and Exclusive Provider Organization (EPO) are health care plans which allow people to cover their medical expenses. While both plans generally deal with the basic service, which is to control medical cost, it is important for individuals to understand the differences between the two in order to choose one that best fits their needs.

The basic features are relatively the same, in the sense that one needs to become a member first. Only then you will be entitled to ask for health care providers, who will offer medical services at a discounted rate.  Both plans will require you to stay within a service or provider’s network, where you will only receive benefits if you have seen a designated doctor, as mentioned in the plan. Moreover, you will be asked to choose a Primary Care Physician, who will take all important medical decisions on your behalf.

HMO plans work on a much larger scale than EPOs as the plan gives you a greater network reach. However, HMO rates are pre-determined i.e. on a capitated basis, where you pay monthly fee to your provider. The premium is usually high when compared to EPO, which works on the basis of the service provided. This is why EPO is considered better suited for rural population, where doctors will be paid only after the service has been performed.

Both plans are regulated by different entities, where HMO is regulated under the HMO laws and regulations, where as EPO is controlled by the Employee Retirement Income Security. Despite both being strictly restricted to consult doctors within their network, HMO gives greater flexibility in cases of emergency, where you may not require a referral. In EPO plans, members will only receive partial benefits if they take out-of-network service.

Instructions

  • 1

    HMO

    It is an organization which provides health care service to members of the plan. It is works just like a traditional health policy but with a lower premium. In return, members are obligated to seek medical guidance from only those doctors and professionals who have a contractual obligation to follow HMO’s guidelines.

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  • 2

    EPO

    A form of a subscription based health insurance where participants will receive health care from affiliated medical providers. Becoming a member allows substantial discounts on the health fee; however, any deviation from the network will force the members to pay the fee out of their own pockets.

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