PPO vs EPO: Difference and Comparison

Healthcare plans are an inevitable part of our lives. However, it may be confusing to make the right choice out of a multitude of options available to everyone.

PPO and EPO are two such healthcare plans that provide services at subsidized rates to consumers. However, they have several varying features and characteristics. 

Key Takeaways

1. PPO plans offer more flexibility, allowing patients to see out-of-network providers without referrals.
2. EPO plans limit coverage to in-network providers, which can result in lower premiums.
3. PPOs have higher out-of-pocket costs, while EPOs provide cost savings by restricting provider networks.

PPO vs EPO 

PPO is a type of health insurance plan that allows policyholders to choose any doctor or specialist they want without a referral and requires them to select a primary care physician. EPO is a type of health insurance plan with more restrictions on which healthcare providers’ policyholders can see.

PPO is a health care insurance plan comprising doctors and other health care providers. The main aim of PPO is to ensure that the plan holders get medical services at rates that are significantly lower than the market rates.

PPO plans to eliminate the need to choose a primary care doctor. PPO plans also don’t require referrals to get prescriptions from a specialist.

EPO refers to a health insurance plan which eliminates the need for a primary care provider. However, EPO plans necessitate the need to visit healthcare providers within the pre-set network.

EPO plans charge plan holders only for the services that are utilized. Speculations suggest that EPOs were in existence from as early as 1983.

Comparison Table

Parameters of Comparison	PPO	EPO
Full Form	PPO refers to a preferred provider organization.	EPO stands for Exclusive Provider Organization.
Definition	PPO refers to a health insurance plan composed of doctors, and other health care providers.	EPO refers to a health insurance plan which eliminates the need of a primary care provider.
Costs	PPO costs more than EPO.	EPO is a cost-effective plan.
Nature	PPO offers a wide plethora of services to its plan holders.	EPO plans are limited to some specific services.
Area of Coverage	Plan holders of PPO can access both in-network and out-of-network health care providers.	Plan holders of EPO can access only in-network healthcare providers.

What is PPO?

PPO refers to a preferred provider organization. Other names of PPOs include participating provider organizations and preferred provider options.

By definition, PPO consists of doctors and other health care providers. The main aim of PPO is to ensure that the plan holders get medical services at subsidized rates. 

PPO provides several services to its users. The most prominent of these is the utilization review.

Other facilities include a pre-certification requirement. PPOs were organized from early 1980 onwards.

In PPO plans, patients are provided exclusive services from any doctor, health care provider, or hospital. The plans also allow flexibility in choosing healthcare professionals not covered in the plans.

In some instances, the cost to avail of out-of-network services is higher than in-network services. In addition, most PPO plans cover prescription drugs as well.

PPO plans to eliminate the need to choose a primary care doctor. PPO plans also don’t require referrals to get prescriptions from a specialist.

Some organizations offering PPO plans are Humana, Aetna, and Beech Street. To conclude, PPO plans offer health care services to consumers at a subsidized rate. 

What is EPO?

EPO stands for Exclusive Provider Organization. By definition, EPO refers to a health insurance plan which eliminates the need for a primary care provider.

However, EPO plans necessitate the need to visit healthcare providers within the pre-set network. In EPO plans, there is no provision for out-of-care service, and visits require pre-authorization.  

In EPO plans, plan holders pay in proportion to the facilities availed by them. In addition, EPO plans to follow a payment-for-service policy.

Evidently, plan users pay only for those services that they avail. Speculations suggest that EPOs were in existence from as early as 1983. However, EPO plans initially were an extension of PPO plans. 

EPO plans are significantly restrictive as they offer only some limited healthcare services to plan holders. In addition, EPO plan holders have to pay entire costs to avail services of out-of-network doctors.

However, one significant advantage of enrolling in EPO plans is that they are relatively more cost-effective when compared with other plans. 

EPO plans don’t cover any emergency services that are outside their provisions. Additionally, rigid rules make it difficult for an individual to switch from an EPO plan to any other plan.

Thus, EPO can be classified as a cost-effective health insurance plan that is significantly restrictive in its choice of services. 

Main Differences Between PPO and EPO 

1. PPO refers to a preferred provider organization. In contrast, EPO stands for Exclusive Provider Organization.
2.  PPO comprises of medical doctors, hospitals, and other health care providers. On the other hand,  EPO is a health insurance plan which eliminates the need for a primary care provider.
3. PPO plans cost more than EPO plans. On the other hand, EPO plans are cost-effective in nature.
4. PPO offers a wider plethora of services to its plan holders as compared to EPO plans.
5. Plan holders of PPO can access both in-network and out-of-network healthcare providers. In contrast, plan holders of EPO can access only in-network healthcare providers.