What Is an EPO Health Insurance Plan?

A health plan that keeps your costs down … with caveats.

An exclusive provider organization (EPO) is a less popular form of health insurance that may have lower costs for healthcare than you would pay with a preferred provider organization (PPO) or health maintenance organization (HMO).

As the name suggests, these plans have a network of doctors, hospitals, pharmacies, and other healthcare providers that they work with exclusively. In exchange for reduced rates to provide you with medical care, healthcare providers in this type of plan get a steady stream of business.

Structured somewhat like a point-of-service (POS) health plan, EPOs are a form of managed care and are usually cheaper than a PPO and HMO. You may not have a deductible for in-network care, but you will probably have copayments and coinsurance.

You may not need a primary care doctor, and you may not need a referral to see a specialist – as long as the specialist is in your plan’s network.

Still, EPOs can be very restrictive. You may need to call the health plan for prior approval for some health services. You will probably have no out-of-network coverage – and, depending on the plan, may not be covered even in an emergency – meaning if you see a doctor or visit a hospital outside of your network, you’ll be stuck with paying the entire bill. You also have no coverage for filling a prescription at the wrong pharmacy and having blood work done at the wrong lab.

It is very important to understand all of your in-network, and out-of-network, costs before you sign up for a health insurance plan. You should always consider all of your anticipated healthcare costs, as well as plan for unanticipated healthcare costs, before choosing a health plan.