The main difference between PPO, HMO, EPO and POS plans is how much they cover when you see a doctor outside the plan’s network and whether you need a referral to see a specialist. HMOs and EPOs generally pay nothing out of network except emergencies. PPOs pay part of out-of-network care and don’t require referrals. POS plans sit in between, with a primary care doctor who refers you and some out-of-network coverage.
That flexibility shows up in the price. Plans with tighter networks usually have lower premiums, and plans that let you go anywhere cost more. The rest of this guide covers how each type works day to day, what it typically costs, and a simple way to decide which one fits your situation.
The four plan types at a glance
| Plan type | Out-of-network coverage | Referral for specialists | Primary care doctor required | Typical premium |
|---|---|---|---|---|
| HMO (health maintenance organization) | Emergencies only | Usually yes | Usually yes | Lowest |
| EPO (exclusive provider organization) | Emergencies only | Usually no | Usually no | Low to middle |
| POS (point of service) | Yes, at higher cost | Usually yes | Usually yes | Middle |
| PPO (preferred provider organization) | Yes, at higher cost | No | No | Highest |
These are general patterns. Insurers can design plans with their own twists, such as an HMO that allows self-referral to an OB-GYN or a PPO with a narrow network. The plan’s Summary of Benefits and Coverage (SBC) is the document that tells you the actual rules.
Among workers with employer coverage in 2025, KFF’s Employer Health Benefits Survey found 46% were in PPOs, 33% in high-deductible plans with a savings option, 12% in HMOs and 9% in POS plans. On the ACA Marketplace the mix tilts heavily toward HMOs and EPOs, and in many counties a PPO isn’t offered at all.
How an HMO works
With an HMO you pick a primary care physician (PCP) from the network. That doctor handles routine care and sends referrals when you need a specialist, imaging or physical therapy. If you see a specialist without a referral, or go to an out-of-network doctor for non-emergency care, the plan can deny the claim and you pay the full bill.
Many HMOs are built around a specific medical group or hospital system, so coordination tends to be good. Copays are often flat and deductibles lower than in PPOs. The trade-off is the referral step and a smaller network. If your favorite specialist or the hospital you trust isn’t in it, you’ll either switch doctors or pay full price.
How an EPO works
An EPO uses a network like an HMO, but usually without the PCP and referral requirements. You can book directly with an in-network dermatologist or orthopedist. Like an HMO, it generally pays nothing for out-of-network care except emergencies.
EPOs suit people who want to manage their own care and are comfortable checking the directory every time. They’re common on the Marketplace and sometimes offered by employers as a cheaper alternative to a PPO.
How a PPO works
A PPO lets you see any provider without a referral. In-network care costs less, and out-of-network care is partly covered, usually with a separate, higher deductible and coinsurance. For example, a plan might pay 80% in network and 60% out of network after separate deductibles.
The catch with out-of-network care is balance billing. The PPO pays a percentage of what it considers the “allowed amount,” and an out-of-network doctor can bill you for the difference between that and their full charge, unless the No Surprises Act or a state law protects that situation (emergencies and certain care at in-network facilities are protected). Out-of-network spending also may not count toward your in-network out-of-pocket maximum, and some plans have no out-of-network cap at all.
Example: Lena’s PPO pays 60% out of network after a $3,000 out-of-network deductible she has already met. She sees an out-of-network specialist who charges $400. The plan’s allowed amount is $250, so the plan pays $150 (60% of $250). Lena owes $100 in coinsurance plus the $150 gap between the charge and the allowed amount, for $250 total. The same visit in network might have cost her a $50 copay.
How a POS plan works
A POS plan combines features. You choose a PCP who coordinates your care and gives referrals, like an HMO. You can also go out of network and get partial coverage, like a PPO, but you’ll pay more and often need to file the claim yourself. Some POS plans require a referral even for out-of-network care to be covered at all.
POS plans make sense if you mostly want HMO-style pricing but have one out-of-network doctor you see occasionally. Fewer insurers offer them than the other three types.
Comparing the real cost, not just premiums
Premium is what you pay every month whether or not you use care. Your total yearly cost is premiums plus what you pay when you use care: deductible, copays and coinsurance, up to the plan’s out-of-pocket maximum. For 2026, ACA rules cap in-network out-of-pocket costs at $10,600 for an individual and $21,200 for a family, and those caps rise to $12,000 and $24,000 for 2027 plans. Many plans set lower limits.
Example: Marcus is comparing two employer plans. The HMO costs $120 a month with a $500 deductible and a $4,000 out-of-pocket max. The PPO costs $230 a month with a $1,500 deductible and a $6,000 out-of-pocket max. In a light year (two visits and a generic prescription), the HMO costs him about $1,440 in premiums plus maybe $100 in copays, versus $2,760 plus a similar amount for the PPO. In a worst-case year, the HMO tops out at $5,440 ($1,440 plus $4,000) and the PPO at $8,760 ($2,760 plus $6,000). Unless he needs out-of-network care, the HMO costs less in both scenarios.
A PPO earns its higher price when you regularly use out-of-network providers, live in two places, travel often for long stretches or have a family member at college out of state. If none of those apply, you may be paying for flexibility you won’t use.
How to pick the right plan type
- List every doctor, specialist, hospital and pharmacy you or your family use, and anyone you expect to see next year.
- Look each one up in the plan’s provider directory, then call the office to confirm they take that specific plan (offices often accept one network from an insurer but not another).
- Check the formulary for every regular prescription and note its tier.
- Decide how you feel about referrals. If you see several specialists often, an HMO’s referral step adds phone calls and wait time.
- Estimate a low-use year and a high-use year for each plan: premiums plus expected cost sharing, and premiums plus the out-of-pocket maximum.
- Check whether the plan is HSA-eligible if a savings account matters to you. Any of the four types can be built as a high-deductible plan.
- Read the SBC for out-of-network rules, prior authorization requirements and whether out-of-network costs count toward the cap.
A few rough rules that hold up in most cases:
- Healthy, budget-focused and happy with local doctors: HMO or EPO.
- Want to self-refer but don’t need out-of-network coverage: EPO.
- Have a specialist you won’t give up who is out of network everywhere else: PPO or POS.
- Family split across states or frequent long-term travel: PPO with a national network, or check whether an HMO has reciprocal coverage.
Network traps to watch for
Narrow networks are common, especially in lower-cost Marketplace plans. Some plans include one hospital system in a metro area and exclude its competitor. Before you enroll, check which hospital you’d go to in an emergency and for planned care like childbirth.
Provider directories are often out of date. A listing doesn’t guarantee the doctor is accepting new patients or still in the network. Under the No Surprises Act, if you rely on an inaccurate directory and get billed out of network, you’re generally only responsible for in-network cost sharing, so screenshot or save the directory page showing the provider listed.
Networks also change between years. Your doctor being in network for 2026 doesn’t guarantee 2027, so recheck every open enrollment.
Common questions
Is a PPO better than an HMO?
Not automatically. A PPO gives more freedom and out-of-network coverage, but it usually costs more in premiums and deductibles. If all your doctors are in an HMO’s network and you don’t mind referrals, the HMO often costs less for the same care.
Do HMOs cover emergencies out of network?
Yes. ACA rules require plans to cover emergency care at in-network cost sharing, without prior approval, even at an out-of-network hospital. Follow-up care after you’re stable may need to move to an in-network provider.
What is the difference between an EPO and an HMO?
Both cover only in-network care except in emergencies. The main difference is that an EPO usually lets you see specialists without a referral, while an HMO typically requires a primary care doctor to refer you.
Can an HMO be HSA-eligible?
Yes. HSA eligibility depends on the deductible and out-of-pocket rules, not the network type, so an HMO, EPO, POS or PPO can all be designed as high-deductible plans. Starting in 2026, ACA bronze and catastrophic plans also qualify.
What happens if my doctor leaves the network mid-year?
Under the No Surprises Act’s continuity of care rules, if you’re in active treatment for a serious condition, pregnant or scheduled for surgery, you can generally keep seeing that provider at in-network rates for up to 90 days.
Before you enroll
- Confirm every regular doctor and hospital by phone, not just the directory.
- Price a high-use year, not only the monthly premium.
- Check out-of-network deductibles and whether there’s an out-of-network cap.
- Look up prior authorization rules for services you expect to use.
- Save a copy of the SBC and your directory search results.
You can compare Marketplace plans and their network types on HealthCare.gov.
Editorial note: This article is general information, not insurance or medical advice. Figures were checked as of November 2026; confirm plan details with the insurer, your employer’s benefits office or HealthCare.gov.