What鈥檚 in a name? When it comes to health plans sold on the individual market, these days it鈥檚 often less than people think. The lines that distinguish HMOs, PPOs, EPOs and POS plans from one another have blurred, making it hard to know what you鈥檙e buying by name alone鈥揳ssuming you鈥檙e one of the few people who know what an EPO is in the first place.聽
鈥淣ow, there鈥檚 a lot of gray out there,鈥� says Sabrina Corlette, project director at Georgetown University鈥檚 Center on Health Insurance Reforms.
Ideally, way to determine what sort of access聽members have to providers outside a plan鈥檚 network, including cost-sharing for such treatment, among other things. But since there are no industry-wide definitions of plan聽types and state standards vary, individual insurers often have leeway to market similar plans under different names.聽In general:聽
- Health maintenance organizations (HMOs) cover only care provided by doctors and hospitals inside the HMO鈥檚 network. HMOs often require members to get a referral from their primary care physician in order to see a specialist.
- Preferred provider organizations (PPOs) cover care provided both inside and outside the plan鈥檚 provider network. Members typically pay a higher percentage of the cost for out-of-network care.聽
- Exclusive provider organizations (EPOs) are a lot like HMOs: They generally don鈥檛 cover care outside the plan鈥檚 provider network. Members, however, may not need a referral to see a specialist.
- Point of Service (POS) , but they鈥檙e often a sort of hybrid HMO/PPO. Members may need a referral to see a specialist, but they may also have coverage for out-of-network care, though with higher cost sharing.聽
More From This Series Insuring Your Health
Although insurers identify plans by type in the plan coverage summaries they鈥檙e required to provide under the health law, one聽PPO may offer very different out-of-network coverage than another.
鈥淵ou have PPOs with really high cost sharing for out-of-network services, which from a consumer perspective seem a lot like HMOs,鈥� says Corlette. Some plans labeled as PPOs don鈥檛 offer out-of-network services at all, experts say. On the other hand, some HMOs have an out-of-network option that makes them seem similar to PPOs.聽
Then there are EPOs. 鈥淧eople have no idea what an EPO is,鈥� says Jerry Flanagan, lead staff attorney at Consumer Watchdog, an advocacy organization that recently filed a class action lawsuit against Anthem Blue Cross in California. They claim, among other things, that the insurer enrolled people in EPO plans with no out-of-network coverage who believed they were being enrolled in PPO plans that provided such coverage.
鈥淢aterials at the time of enrollment and in member鈥檚 Explanation of Benefits have clearly stated that the plan was an EPO plan which may not have out-of-network benefits,鈥� said Darrel Ng, a spokesperson for Anthem Blue Cross, in a statement.聽
This year, HMOs and PPOs dominated the plans offered by insurers on the health insurance exchanges. According to an analysis of plans sold in the 36 states for which the federal government runs the online insurance marketplace as well as the plans sold on the California exchange, HMO聽offerings made up 40 percent and PPOs another 40 percent.聽POS plans made up 12 percent and EPO plans 7 percent.聽
Higher premiums didn鈥檛 necessarily correlate with better out-of-network coverage, says聽Caroline Pearson, vice president at Avalere Health, a research and consulting firm. HMO plan premiums, in fact, were slightly higher on average than those for PPOs, according to the Avalere analysis.聽
Pearson says the explanation may be that insurers anticipated that people who bought a PPO would probably want to use out-of-network providers. Since out-of-network spending doesn鈥檛 count toward the out-of-pocket maximum that people are responsible for before insurance picks up the full tab, these people were likely to be cheaper to insure, she says. (Next year, the out-of-pocket maximum will be $6,600 for single coverage and $13,200 for a family plan.)
Based on the 18 states that have released their proposed products and rates for next year, it doesn鈥檛 appear that plan types are likely to change significantly, says Shubham Singhal, leader of the health care practice at management consultant McKinsey & Co.
鈥淧erhaps a few more EPOs will emerge,鈥� he says. 鈥淪ome of the health plans that might have introduced metal-level plans through the HMO are viewing the EPO as way to introduce a non-gatekeeper product.鈥�
Since聽you can鈥檛 rely on plan type to provide clear guidance on out-of-network coverage, there are three basic questions to investigate when evaluating a plan, says Pearson:
- Is there out-of-network coverage?
- Does that out-of-network spending accrue toward the member鈥檚 out-of-pocket maximum? Legally it doesn鈥檛 have to, but some plans include it.
- Do members need a primary care physician gatekeeper?聽
That鈥檚 only the beginning. Once you聽figure out whether a plan covers out-of-network care, it can be difficult to find out whether your doctor is even in that plan. You can聽check with you doctor鈥檚 office, but sometimes they don鈥檛 know. You can also look at provider directories to see who is and isn鈥檛 in a plan鈥檚 network, however, that information frequently proved inadequate or inaccurate last open enrollment period. But understanding the alphabet soup of plan types is an important first step.聽
Please contact Kaiser Health News to send comments or ideas for future topics for the Insuring Your Health column.