Difference Between HMO, PPO & EPO Plans in California (2024)

Posted: May 02, 2024

Everyone has to have health insurance now that theAffordable Care Act(ACA)is in place, but that doesn’t mean healthcare has gotten any less confusing. We tend to go with what we knowor what we’ve always had when it comes to insurance coverage, but the reality is that you have options.

In California, health insurance plan options primarily include Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO).Other options includeExclusive Provider Organization (EPO)and Point-of-Service (POS) insurance plans,which are growing in popularity in California.

While all of these plans can providethe coverageyou need, it’sessentialto understand eachoptionandcompare them.Failing to grasp the differences between HMO, PPO,EPOand POSplans could lead to significant unexpected costs and disappointment inswitchingdoctors due to a change in insurance coverage. These plans provide coverage, but there are substantial differences in how they work and how much they cost.

Whether you’re without insurance coverage and looking to purchase a plan shortly orjust exploringyour optionsas a Californian, we’ve provided some insightinto HMOs, PPOs, EPOs,POSsand Kaiser Permanente.

The Difference Between EPO,HMOand PPO Plans
Health Maintenance Organization (HMO)
Advantages of an HMO
Preferred Provider Organization (PPO)
Advantages of a PPO
Exclusive Provider Organization (EPO)
Advantages of an EPO
What Is CA Kaiser Permanente?
Locations Covered in California by Kaiser Plans
Which of These California Health Insurance Plan Options Is Best for Me?
EPO, PPO and HMO Health Insurance Quotes in CA

The Difference Between EPO, HMO and PPOPlans

Of thedifferentplan types — HMO, PPO and EPO — you haveHMO and PPOat two opposite ends of the spectrum, with EPOand POSplansin the middle.It would be best to recognizethe difference between HMO and PPO plans first.Then,you can see where EPOand POSfitinas a hybrid of the other two.

In general, the difference between HMO and PPO plans fall into a few categories:

1. Cost
2. Network
3. Control

The term “network” refers to a group of doctors, specialists, hospitals, labsand so on.

HMO plans are usually cheaper than PPO plans. They generally come with lower monthly premiums and out-of-pocket fees than PPOs. On the other hand, HMO plans have a more restricted network and less control when visiting specialists. PPO plans offer more flexibility regarding the network and control overseeing health care professionals. We’ve included specifics on each of these plan categories below.

Health Insurance Plans Available in California

Let’s dive deeper into each health insurance option and its advantages:

1. What Is anHMO?

HMO plans primarily revolve arounda primary care physician(PCP). Your PCP is the doctor yousee for annual physicals or when you’re sick. You can choose yourprimary care physician, but they must fall within the HMO’s local network of healthcare providers. Here are more specifications about HMOs:

1. For you, as the patient, this plan is very hands-off.
2. Whenyou have a problem, you schedule an appointment with that PCP since they are treated asgatekeepersto your healthcare.
3. Everything is determined and coordinated through yourprimary care physician.
4. Primary care physicianswill refer you to a specialistwho also falls within the local network of healthcare providers.

But what happens when yourprimary care physiciandoesn’t think you need additional treatment?What if they believe your condition doesn’t warrant seeinga specialist? These situations can occur,and you should consider them. As long as you choose a PCP you trust, thislikelywon’tpresent any issues.

All of your healthcare is provided within a local network — if you see a provider outside of the network, you are responsible for paying the cost out of your pocket. If you have a doctor you like, anticipate a change in insurance coverage and are considering an HMO plan, make sure your doctor is in the HMO plan’s network. If not, you’ll have to switch doctorstohave a PCP who falls within your plan’s network.

There is one exception to the HMO network rule.What ifyou’re onvacationand have an emergency? In this case, your HMO plan would usually cover the cost as if the emergency occurred in your network.However, it must be accepted by the insurance company as a true emergency.

What Are theAdvantages of an HMO?

Overall, HMO networks are small, but there are two benefits of an HMO plan — both within the financial category. Since you’re working within the HMO network, you’ll probably never have to file a claim. Instead, your insurance company works directly with your healthcare providers. Also, HMO plans almost always cost less — they usually have lower monthly premiums andfewerout-of-pocket expenses.

2.What Is aPPO?

PPO plans fallon the opposite end of the spectrumandare almost always more expensive. However, with the additional cost comes added flexibility and freedom. There is still a network, but youcan visitproviders outside of your network if you want.

Out-of-network providers usually come with a higher out-of-pocket expense, but it’s possible to make that choice.Having the option to goout of networkis often helpful for people who may have a doctor they like and don’t want to change when they get a new insurance provider.

With a PPO plan, there’s also more flexibility whenselecting a PCP and seeing specialists. If you have a PPO plan, you are not required to have a PCP and cansee any provider you choose, but you will ultimately save money by choosing a doctor in the network.

What Are theAdvantages of a PPOPlan?

Youdon’t needa referral from your PCPto see a specialist.You can make that decisionwithoutseeingyourprimary care physicianfirst. You can evensee a specialistout of your network.

With all of this flexibility and freedom comes a higher price tag and a higher level of involvement in your healthcare, as you’re often the one scheduling and coordinating appointments.In contrast, a primary care physician oversees most of that responsibilityin an HMO plan. If you choose to see a doctor outside of your network, you may also need to gather information and submit the claim to your insurance company to get part of the cost covered.

There are a few critical differences between HMO and PPO plans,and there is no one-size-fits-all solution. Thebest onefor you ultimately depends on your preferences.

3. What Is anEPO?

EPO is increasingly popular in California. Thisoption isa hybrid of the HMO and PPO plans. You’ll have many of the same freedomswith a PPO plan. Here is a list of features for the EPO plan:

1. You won’t need to commit to a PCP or have a PCP referral every time you want to go to a specialist.
2. Instead of having complete freedom to choose between a preferred network andanout-of-networkprovider, you’ll have an exclusive network you must use.
3. You’ll be covered out of network in the case of an emergency.

What Are theAdvantages of an EPO?

Since youhave a restriction of using an exclusive network with the EPO plan, it is often cheaper than a PPO plan. This makes EPOan excellent compromise for thoseseekingmore control over their healthcare without paying significantly more in insurance premiums. Again, you must know whetheryour doctor and any specialists you see are in the network, as you’llbe responsible for allcosts if youseea doctoroutsideof the EPO network.

4.What Is a POS Health Insurance Plan?

POS health insurance plans work differently from the rest. This arrangement lets you decide whether to stay in the network at each point you need health care services. The cost may vary depending on the health care provider or medical facility. Like EPOs, a POS combines the benefits of HMOs and PPOs. You can have a designated PCP who refers you to a network of specialists when needed. You may also receive care from non-network providers but incur higher out-of-pocket expenses like PPOs.

Your health insurance provider pays most of the bill when you visit an in-network provider and reach your health insurance deductible. The insurer will likely pay a much smaller portion of the bill when you go for out-of-network treatment. If you need emergency care, your POS will provide the highest level of coverage. It does not matter whether the facility is in or out of the network.

The difference between POS and EPO is that with EPO, you do need to work with a PCP or get a referral to see a specialist. That is not the case for POS.

What Are the Advantages of a POS Plan?

POS health insurance plans have many benefits. You have the freedom to visit out-of-network health professionals. You get wider access to doctors and hospitals, although you will pay more than in-network services. Generally, POS plans have lower out-of-pocket expenses. Also, POS health insurance offers copays for in-network providers on each visit instead of you paying the deductible before getting coverage. This arrangement is especially beneficial if you don’t have large medical bills.

Out-of-network providers will usually require you to meet the deductible before getting coverage. However, the annual cost is lower and there are limits on how much you pay throughout the year. When you exceed your out-of-pocket limit, the insurance covers visitations and treatments.

What IsKaiser Permanente?

California is home toKaiser Permanente, one of the country’soldest and largest HMOs.Founded in 1945 and headquartered in Oakland, California, the Kaiser Foundation Health Plan, Inc.,is aninsurance providerthatserves people in:

1. California
2. Colorado
3. Georgia
4. Hawaii
5. Virginia
6. Maryland
7. Oregon
8. Washington
9. The District of Columbia

The organization also backs Kaiser Foundation Hospitals andthe Permanente Medical Group, Inc., a physician group practice of over 9,000 physicians. Kaiser Permanente has created its own brandednetwork.

As an HMO, Kaiser has a local network of providers in California that includes PCPs, laboratories, hospitals and pharmacies.If your region does not have a Kaiser facility, you canget care from places Kaiser has contracted with. Theymay notcarry the Kaiser name, but they are consideredpart ofthe Kaiser network.

The Kaiser networkserves millions ofCalifornians throughan extensive physician network, hundreds of medical offices and nearly 40 hospitalsthroughout northern and southern California. Youcan view Kaiser locationsthrough an online search.

California Locations Coveredby Kaiser Plans

The HMO breaks down the areas it serves in thestate’sregions. InNorthern California,Kaiser serves:

• Central Valley
• Roseville
• Santa Cruz
• Sacramento
• San Jose
• Santa Clara
• East Bay
• Fresno
• Greater San Francisco
• Greater Southern Alameda
• Marin/Sonoma
• Napa/Solano
• Diablo
• Redwood City
• South Sacramento

InSouthern California,Kaiser serves:

• Coachella Valley
• Orange County
• Kern County
• San Diego County
• Tri-Central Area
• Inland Empire
• Metro Los Angeles/West Los Angeles
• West Ventura/Valleys

You may have heard of Kaiser Permanente’s campaign called “Thrive.” This wellness campaign emphasizes preventive care and includes 24/7 access to nurses over the phone, disease management programs, healthy lifestyle programs andclass and fitness program discounts, among others.

In some ways, Kaiser Permanente takes HMO plans to a new level,having its medical groups and hospitals at its corerather than affiliating with various health systems. However, it is still an HMO plan at its base and therefore comes with the restrictions that define an HMO plan — having to stay within the network and managing all of your care through first going to see a PCP.

Which of These California Health Insurance Plan Options Is Best forYou?

The first step islookingatyour options. Not allfourplans are offered everywhere, so it’s best to start bylookingat what’s available to you.If applicable, you canstartentering some simple information about yourself and your family on our website.Requesting a free quotewill give you a list of options, including the plan type.Once you know what plans are available, you canconsider your priorities.

There is no winning planbut onethat willbetter fityou and your family. Consider how important each of these factors is:

• Cost:If you’re on a strict budget and finding the cheapest healthcare option is your priority,an HMO plan will likely beyour best fit. You could also explore EPOor POSplanstobalance affordability and control.
• Network:If you wantsome of your costs covered—whether you see a doctorinor out of the networkandyou have room in your budget for a higher premium cost—a PPOor POSplan will probably bebetterfor you.
• Control:Determinehow you feel about your PCP managing your care. Ifyou havestrong opinionsaboutthat,it will be a deciding factor. If you like the idea of yourprimary care physicianmanaging your care, an HMO plan will be a good fit for you. Ifyou’d like to avoid referrals from your PCP when you need or want to see a specialist, a PPO or EPO planwill probablybe a better fit.

Whenconsidering your options, remember that each type of insurance plan in California willprovideyouwiththenecessary health care services. The way theydeliverthose services just looks different. Individuals and families come in all shapes and sizesand so do insurance plans.

Frequently Asked Questions (FAQs)

We’ll wrap things up by answering some common questions about the different health insurance plans in California:

Is a POS Plan the Same as an HMO?

POSs and HMOs are different plans. HMO gives you access to a primary care physician you consult for your medical needs. You can select a PCP, but they must be within the plan’s local network. POS also enables access to a primary care physician, but you can consult one out of network, although you’ll likely pay more.

How Does a POS Plan Work?

POS plans combine the elements of PPO and HMO. You get a designated PCP to refer you to network specialists like HMOs. Like PPOs, you can get non-network care with higher out-of-pocket expenses. If you purchase a POS plan, you may also be responsible for coinsurance, copayments and an annual deductible.

What Are the Differentiating Factors Between HMOs, PPOs, EPOs and POSs?

There are six differentiating factors between the various health insurance plans:

1. The requirement of a primary care physician
2. The requirement of referral to see a specialist or get other services
3. The requirement of preauthorization when accessing health care services
4. The cost-sharing amount when you use your health insurance
5. Whether the health insurance plan will pay for out-of-network care
6. Whether you have to file insurance claims and do paperwork

EPO, PPO and HMO Health Insurance Quotes inCalifornia

Now that you have some background information onthe different plans, you canget an insurance quote. Whether you’re currently uninsured andneedcoverage oryouwant to shop around,Health for California’sonline toolallows youto get free health insurance quotes instantly.You cansee all of your optionsandfind out if you qualify for government assistance.

All you need to do to get started is enter your gender, date of birth and zip code. The free quotes you get willprovideall the details you need, including the plan category,the carrier name, the full price of the plan, the price you pay, a link to view benefits and more. Get started byrequesting a free quotetoday!