EPO vs PPO Health Insurance: Which one is better?

People not working in the healthcare industry often have difficulty understanding employee benefits. Employers and employees often find it confusing to compare an EPO vs PPO, even the most fundamental of healthcare concepts.

In this article, we’ll compare and contrast Exclusive Provider Organizations and Prefered Provider organizations while stating the pros and cons of each.

What is an Exclusive Provider Organization (EPO)

Except in the case of a medical emergency, members of an Exclusive Provider Organization, or EPO, must use doctors and providers within the EPO network.

Participants in an EPO don’t need a referral from a primary care physician to see a specialist, which is one of the most significant benefits.

If you choose a doctor or specialist in your local network, EPO health plans are generally less expensive than PPO policies. Your medical care may not be covered if you seek treatment outside of your plan’s network.

EPO plans are also often less expensive than PPO plans, offering less flexibility.

You should know that EPO plans have a limited network, so your current doctor may not be included. Consequently, you might need to change your primary care physician if you switch to an EPO plan.

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What is Preferred Provider Organization (PPO)?

The Preferred Provider Organization (PPO), a health maintenance organization, is a type of health insurance that provides a network of healthcare providers. 

The main difference between HMOs and PPOs is that participants can choose to seek care from providers in or out of the network.

In any case, it’s important to know that seeing an out-of-network provider will cost more out-of-pocket. 

Although your non-member doctor accepts the PPO rate, your plan may still charge you more than the PPO rate because the provider is not a member.

Also, with a PPO plan, unlike an EPO, a hospital or specialist does not need to refer you for care. 

A PPO plan has the greatest advantage over an EPO plan regarding flexibility. Participants of PPOs have more options when it comes to when and where they seek healthcare.

How Does An EPO Health Insurance Plan Work?

Under an EPO health insurance plan, the insurance company will only provide cost-sharing when a member uses a provider or hospital inside the plan’s network. 

Any health care services received by providers or facilities outside of the network are not usually eligible for payments with few exceptions.

Certain features of an EPO health insurance plan are important to understand to ensure that the business makes the right decision.

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No Primary Care Physician Required

Most EPO plans do not require members to select a primary care physician (PCP). This gives patients more freedom to see whichever providers they would like to without contacting the insurance company to switch PCPs. 

However, choosing a PCP can be beneficial, especially for members who suffer from a chronic illness or a medical condition that requires continuous monitoring.

Visit Specialists Without Referrals

Most EPOs do not require members to get a referral from their PCP to see a specialist. This means that members can contact specialists directly to book appointments instead of first seeing their primary care provider, which can extend the wait time.

No Claim Filing is Necessary

EPO insurance plans are fairly low maintenance, as members are not required to file claims themselves. 

All healthcare services are provided in-network, so the in-network healthcare provider will automatically bill the EPO health plan for any medical services the member receives. 

Under EPO insurance, members are only responsible for paying their copayment, coinsurance, and deductible.

How Does a PPO (Preferred Provider Organization) Health Insurance Plan Work?

In an epic EPO vs PPO, their methodologies are bound to be different. In some cases, here are the following ways PPO works

Cost-sharing: You pay part; the PPO pays part. A PPO uses cost-sharing to help keep costs in check. 

When you see the healthcare provider or use healthcare services, you pay for part of the cost of those services in deductibles, coinsurance, and copayments.

Cost-sharing helps offset the cost of your care. The more you pay for your care, the less your health insurance plan pays, and the lower it can keep monthly premium charges.

Provider networks: If you use a PPO’s network of providers, you pay less. A PPO limits from whom or from where you receive healthcare services by using a network of healthcare providers with whom it has negotiated discounts. 

A PPO’s network includes not just physicians and other healthcare providers, but every imaginable type of healthcare service like labs, X-ray facilities, physical therapists, medical equipment providers, hospitals, and outpatient surgery centers.

Prior authorization: In many cases, a PPO will require you to get non-emergency services pre-authorized. 

Prior authorization is a way for a PPO to make sure it’s only paying for really necessary healthcare services, so the insurers might require you to get pre-authorization before you have expensive tests, procedures, or treatments.

If the PPO requires prior authorization and you don’t get it, the PPO can reject your claim. 

So it’s important to read your policy details to understand whether you need prior authorization before getting certain medical services.

No PCP requirement: Unlike HMOs, you don’t have to have a primary care physician (PCP) with a PPO. You’re free to go directly to a specialist without a referral from a PCP. 

Depending on the situation, you may need prior authorization from your insurance company, so you’ll want to contact your PPO before making a medical appointment, just in case.

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Exclusive Provider Organization (EPO) vs. Preferred Provider Organization (PPO) Health Plan: 

Pro and Cons

A Preferred Provider Organization (PPO) is a type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. Here is a brief list of the pros and cons of opting for a PPO plan.

PPO Pros

  • Do not have to select a Primary Care Physician.
  • You can choose any doctor you choose but offers discounts to those within their preferred network.
  • No referral required to see a specialist
  • More flexibility than other plan options
  • Greater control over your choices as long as you don’t mind paying for them.


  • Higher monthly premium
  • Higher out of pocket expenses
  • Must monitor in-network vs out-of-network to control cost.

EPO Pros

  • No referral to see a specialist, saving you the cost of a copayment and time to see your primary care physician.
  • Having a primary care physician is optional.
  • Emergency care is covered even if you go out of your network.
  • EPOs generally cost you less in premiums and out-of-pocket costs.
  • Your in-network providers will file claims for you.
  • Some have broad, national networks, so you may have access to an in-network doctor when you travel.

Read Also: Your Step-by-Step Guide To Choosing A Health Insurance Plan

EPO Cons

  • You may not be able to continue with your current doctor or specialists.
  • You must use in-network providers unless it’s an emergency.
  • For EPOs with local networks only, non-emergency medical needs will not be covered when you travel.
  • Even if your insurer covers out-of-network emergencies, the provider can still bill you for the difference between its charges and your insurer’s payments.
  • You are responsible for staying in your network. 
  • You are responsible for obtaining prior approval for expensive services and tests.

EPO vs PPO: How much do they cost?

Due to the more flexible nature of PPO plans, individuals will find that their monthly premiums are the most expensive. Compared to an HMO policy, an average PPO plan costs $517 monthly for a 40-year-old, which is 21% more than that for an HMO plan.

Even though a PPO plan tends to be the most expensive health insurance policy, you should not disregard it.

In contrast, EPO premiums are comparable to POS premiums, while HMO rates may be lower and PPO rates may be higher. The average cost of an EPO for a 40-year-old is $469. 

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EPO vs PPO: What are the Differences?

Question EPOPPO
Do I need a primary care physician?Usually, but not always. It varies from plan to plan, but most EPOs require a primary care physician.Not at all. PCPs aren’t required for PPOs. In-network doctors can be selected, but out-of-network doctors will cost more.
Do I need a referral to see a specialist?No. You must make an appointment with a specialist or hospital if you need one. In-network providers must be approved.I don’t. You must schedule an appointment to see a specialist or visit a hospital.
Will any care I receive from an out-of-network provider be covered?Sadly, no. Except for medical emergencies, EPOs don’t cover healthcare an out-of-network provider provides.Definitely. Medical providers outside your network are also allowed to participate in PPOs. There is, however, the possibility of a fee higher out-of-pocket costs.
Will I have to file a claim?No. You will most likely never have to file a claim if your EPO restricts your care to in-network providers because your insurance company pays the provider directly.Yes. You must submit your claims if you receive care outside of your network.
How much will these plans cost?Generally, lower costs.Generally, higher costs.

EPO vs PPO Health Insurance: Which one is better?

PPOs and EPOs share many similarities when staying within their networks. The best choice depends on the fine print, costs, and your likelihood of needing or wanting to use out-of-network medical care.

You might be better off choosing a PPO plan if your favorite doctor is not part of an EPO plan, which might or might not have your doctor in-network but will cost you less overall even if your doctor is not in-network.

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So, when choosing between an EPO and a PPO, which should you choose? The answer depends on your circumstances. Even so, it’s important to understand your options no matter your chosen plans. Your employees should know the differences when considering EPO vs. PPO.


Value Penguin – EPO Health Plans: What Are They? 

Exclusive Provider Organization – EPO Health Insurance Plans

Verywellhealth – What Is a PPO and How Does It Work?

bbgbrokers – How Does EPO Insurance Work?


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