Can an EPO Health Insurance Plan Save You Money?

A review of exclusive provider organization plans, or EPOs, and their benefits and drawbacks.

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Exclusive provider organization plans, or EPOs, are a form of health insurance that attempts to rein in costs by limiting insurance coverage to a select group of healthcare providers. Unlike PPOs and HMOs, which allow for some out-of-network care, people with EPOs must receive all of their care within an EPO network in order for the EPO plan to pay.

The benefits of an EPO plan Because EPO plans limit patient access to a specific group of providers, they can negotiate favorable reimbursement rates with those healthcare providers that can lead to lower monthly premium payments by patients.

The money-saving benefit of EPOs is a big reason many people choose them, but they do provide a bit more in-network flexibility than HMOs as well. While HMOs require people to obtain referrals from a primary care physician before visiting a specialist, in many cases no referral is required for visiting specialists participating in an EPO plan.

The drawbacks of an EPO plan EPO plans are often less expensive than HMO and PPO plans, but those cost savings come with a hitch.

Both HMOs and PPOs provide for more doctor choice than EPO plans and that flexibility can be a deal-breaker for people considering whether an EPO plan is right for them.

In most cases, an HMO will help pay for out-of-network care as long as a patient's primary care physician has sent a referral. A PPO will similarly provide for out-of-network care, often without a referral, but at a higher out-of-pocket cost to the patient.

Because EPOs' provider network is limited, there's a good chance that a patient's existing doctor may not be part of the EPO's network and that would mean changing doctors -- something that would make many people balk.

Even if people are willing to give up doctor flexibility for cost savings, they may find that an EPO plan is hard to find because HMOs and PPOs remain far more common. Last year, EPO plans made up just 7% of plans offered on the Obamacare health insurance exchanges.

Other considerations Although EPO plans don't provide out-of-network coverage, that doesn't mean patients are left high and dry in the case of an emergency. All EPO plans are required to provide some insurance coverage in those instances