Health Benefits

HMO, PPO, and EPO – What’s the Difference and Why Does It Matter?

CalPERS 457 Roth Plan Option

When it comes to choosing a health plan (PDF) that fits your needs, the process may seem daunting. Open Enrollment is around the corner (Sept. 18 through Oct. 13), which is a time to shop and switch plans, enroll, add or remove dependents, or cancel coverage.

CalPERS offers active members three types of health plans to choose from—a health maintenance organization (HMO), a preferred provider organization (PPO), and an exclusive provider organization (EPO).

The type of plan you choose will determine how much you pay out of pocket and what doctors you can see.

What is an HMO?

An HMO plan includes a network of providers such as doctors, medical groups, hospitals, and labs that you must go through to receive care. In addition:

  • You’ll have a primary care doctor who manages your care. If you need to see specialists or get tests, your primary care doctor will make the referral or request authorization.
  • There is usually a copay for most services.
  • An HMO has a geographically restricted service area, so availability of HMO plans is based on your home or work ZIP code.

Pros and Cons of an HMO?

If you’re watching your wallet and don’t anticipate many doctor visits, an HMO plan may be the right choice for you. HMOs have lower monthly premiums and lower out-of-pocket costs. For example, there are no deductibles in CalPERS HMO plans. And you won’t need to file claim forms when receiving care in the HMO network. Unless it’s an emergency, however, HMO plans require you stay within their network for care. Also, if your current doctor isn’t part of the HMO’s network, you’ll need to choose a new doctor within the network.

What HMOs Does CalPERS Offer?

Basic (non-Medicare) plans include Anthem Blue Cross Select and Traditional, Blue Shield Access+ and Trio, Kaiser Permanente, Sharp Performance Plus, UnitedHealthcare’s SignatureValue Alliance and Harmony, and Western Health Advantage.

What is a PPO?

A PPO plan provides more flexibility in choosing your health care providers, but the costs may be higher than an HMO. In addition:

  • Your maximum copay or coinsurance is less when you stay in network for services.
  • You can see a specialist and access many types of services without a referral. While you’ll be matched with a primary care provider, you can choose not to go through them for care.
  • You’ll pay a deductible before the PPO starts to pay some or all of your bills. You’ll also pay a coinsurance, or percent of the bill, when you get a covered service.

Pros and Cons of a PPO?

You’ll have more flexibility to use in-network and out-of-network providers and can visit specialists without a referral. But PPOs typically have higher out-of-pocket costs than HMO plans.

What PPOs Does CalPERS Offer?

PERS Platinum and PERS Gold. PERS Platinum is available nationwide.

What is an EPO?

An exclusive provider organization (EPO) falls somewhere between an HMO and PPO. It provides the same covered services and lower costs of an HMO along with a broad network and some of the flexibilities of a PPO. In addition:

  • You pay copays, but you don’t pay deductibles or coinsurance, like you would in a PPO plan, so your overall out-of-pocket costs are lower. You’re required to obtain care from the plan’s network of preferred providers.
  • If you receive care out-of-network, you’re required to cover the full cost of services, except for emergency medical care.
  • You’ll be matched with a primary care provider, but don’t need a referral to see a specialist as long as they are within the preferred provider network.

Pros and Cons of an EPO?

You don’t need a referral to see specialists. However, the specialist must be in the EPO network of preferred providers for your insurance to cover the visit. EPOs also offer access to a broad network of providers. An EPO is generally only available in certain rural areas, so check availability.

What EPOs Does CalPERS Offer?

Anthem Blue Cross EPO and Blue Shield Access+ EPO.

Get Started

Check out the Choosing the Right Health Plan for You video and use our Health Plan Search by ZIP code tool to see plans offered in your area and the plans your doctors participate in, and compare monthly premiums.