HMOs, PPOs, EPOs, and what you need to know

What's in a name? When it comes to health plans sold on the individual market these days, it's 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're buying by name alone -- assuming you're one of the few people who know what an EPO is in the first place.

"Now, there's a lot of gray out there," says Sabrina Corlette, project director at Georgetown University's Center on Health Insurance Reforms.

Ideally, a plan's type provides a shorthand way to determine what access members have to providers outside its network, including such things as cost-sharing for treatment. But because there are no industry-wide definitions of plan types and because state standards vary, individual insurers often have leeway to market similar plans under different names. In general:

• Health maintenance organizations (HMOs) cover only care provided by doctors and hospitals inside the HMO's 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's provider network. Members typically pay a higher percentage of the cost for out-of-network care.

• Exclusive provider organizations (EPOs) are a lot like HMOs: They generally don't cover care outside the plan's provider network. Members, however, may not need a referral to see a specialist.

• Point of service (POS) plans vary, but they're 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.

Although insurers identify plans by type in the plan coverage summaries they're required to provide under the health law, one PPO may offer very different out-of-network coverage than another.

Some plans labeled as PPOs don't 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.

Then there are EPOs. "People have no idea what an EPO is," 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. The suit claims, among other things, that the insurer enrolled people in EPO plans with no out-of-network coverage even though these people believed they were being enrolled in PPO plans that provided such coverage.

"Materials at the time of enrollment and in members' Explanation of Benefits have clearly stated that the plan was an EPO plan which may not have out-of-network benefits," Anthem Blue Cross spokesman Darrel Ng said in a statement.

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 offerings made up 40 percent and PPOs another 40 percent. POS plans made up 12 percent and EPO plans 7 percent.

Higher premiums didn't necessarily correlate with better out-of-network coverage, says Caroline Pearson, a 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.

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't 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.)

Since you can't rely on plan type to provide clear guidance on out-of-network coverage, there are three basic questions to investigate when evaluating a plan, Pearson says: Is there out-of-network coverage? Does that out-of-network spending accrue toward the member's out-of-pocket maximum? (Legally it doesn't have to, but some plans include it.) Do members need a primary-care physician gatekeeper?

• This column is produced through a collaboration between The Post and Kaiser Health News, an editorially independent news service that is a program of the nonpartisan Kaiser Family Foundation.