Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • EPO is the exclusive provider organization
  • EPO plans cover benefits with network resources
  • Spending outside the EPO network does not count to plan limits
  • Consumers are free to use EPO network resources without need of referrals
  • In EPO plans, patients decide when they wish to spend more for outside medical services

The exclusive provider organization is a type of managed health care that uses network resources and does not share costs on outside network resources. The EPO does not use a primary care physician to oversee patient care. The customer is free to use network resources, and there is no need for referrals.

Comparison shopping is the ideal way to find the best value in health insurance for an individual or family situation. Click here to start your free health insurance quotes comparison today!

Types of Managed Care Organizations

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Managed care organizations use several types of systems to control costs and improve services.

The main types are the HMO and the PPO. The HMO uses a primary care physician to provide care and direct the use of network resources. The PPO offers more choices and has no primary care doctor or referrals.

  • HMO is the health maintenance organization. This style uses a primary care physician and referrals for network resources. It does not cover outside resources.
  • HMOPOS stands for health maintenance organization point of sale. This is a variation on the HMO that uses a primary care physician empowered to make referrals inside and outside the network. The insurance covers referrals to outside resources at a higher rate of consumer costs sharing.
  • PPO is the preferred provider network. It offers more freedom for the consumer than the HMO. PPO does not use referrals or a primary care physician. Consumers can use outside resources and pay a higher share of the costs.
  • PFFS is the private fixed-fee-for-services model. These are usually small networks of medical service providers that agree to treat patients for a fixed fee. The terms of the pricing set the consumer and insurance shares for each covered service. This model does not use outside resources.
  • EPO stands for exclusive provider organization. This type of plan uses network resources and does not offer cost sharing on outside resources. The consumers are free to use network resources with no referrals or primary care physician required.

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Advantages of the EPO

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The managers of the EPO gain lower pricing than HMO or PPO because the providers treat the patients with no outside resources. This promises higher volume for the medical service providers and lower prices for the consumers.

EPO subscribers can use outside resources in emergencies such as when away from home or simply out of the service area.

The assessment of any policy depends on the amounts of deductibles, out-of-pocket expenses, copays, and coinsurance.

  • Controls Costs – EPO plans often have lower premiums than PPO or HMO plans due to the simple structure and fewer providers. Deductibles are usually lower than other plans and easier to reach. Plan limits are frequently on the low end of the range.
  • Freedom of in-Network Choice – The EPO does not use a primary care physician to oversee patient care and refer them to specialists. Subscribers can use the network resources to get the care they need.
  • Counts towards Limits – With no out of network costs sharing, all the network sending counts towards the deductible and the out-of-pocket limit. Once reached, the deductible turns on the insurance company cost-sharing, and the consumer’s co-pays and coinsurance will count to the limit.

Expenses and Consumer Spending

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The EPO attempts to reduce consumer spending with low deductibles, smaller copays, and lower coinsurance rates. Whether the EPO reduces spending is a matter of usage. Consumers that choose to use outside resources will send without the benefit of reducing the deductible or gaining against the overall out-of-pocket limit. The below-listed items describe consumer spending and the EPO.

  • Coinsurance is the consumer share of cost sharing in an insurance plan. It is usually stated as a percentage of the costs. Some sources refer to both the insurance and consumer payment as coinsurance; most plans use the term to refer to the consumer share.
  • Copays are fixed fees that consumers must pay when getting a covered service. The copay is usually a small part of the costs of the service. For example, a $200 CT scan might cost the consumer only a $40 copay. Office visits might have a standard copay OF $20 per visit.
  • Deductibles are payments that consumers must make to trigger the insurance company to pay its share of costs. Deductibles are like a switch; they turn on the flow of insurance money for the consumer’s benefits.
  • Out-of-pocket expenses include copays, deductibles, and coinsurance. It also includes costs without cost-sharing of any kind.

    Obamacare places a limit on out-of-pocket expenses, and this limit applies to network resources. There is no real limit on spending outside of plan networks; consumers must guard against excessive health debts when using outside services.

Obamacare Limits on Expenses

Out of pocket expenses and deductibles are major sources of spending for health policyholders. They can be unpredictable. The federal government sets the annual limits. A qualified health plan has extensive coverage. They set 2017 limits as described in the below-listed items.

  • The 2017 limits on out-of-pocket expenses for individual is $ 7,150.00.
  • The 2017 limits on out-of-pocket expenses for families is $ 14,300.00.
  • The 2017 limits on deductible expenses for individual is $ 7,150.00.
  • The 2017 limits on deductible expenses for family is $ 14,300.00.

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Variations on the Exclusive Provider Organization

There are many varieties of EPO. Private companies can combine the features of HMO, PPO, ad POS to create new insurance products.

Emphasizing consumer choice and savings, EPO variations can help consumers find the right fit for their medical and budget situations.

Comparison shopping is essential when selecting a plan. One can examine the areas of greatest concern.

  • Gated EPO – The gated EPO adds the primary care physician and referrals to in-network resources. This variation helps allocate resources on the basis of need. Some local networks connect to broader networks when customers travel away from home.
  • EPO HSA – the EPO combines with high deductible plans that use the Health Savings Account. The HAS is a tax-advantaged savings program to provide funds for out-of-pocket expenses. Funds not used during a given calendar year can rollover until needed. The federal government sets annual limits for maximum contributions and minimum levels of high deductibles.

EPO and Metallic Tiers

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The EPO works across all the metallic tiers. Consumers can choose the level of coinsurance and copays they wish in exchange for lower premiums. The below-described levels of coverage are consistent with the Obamacare Marketplace.

  • Platinum EPO provides 90 percent insurance coverage for essential benefits.
  • Gold EPO provides 80 percent insurance to 20 percent coinsurance for essential benefits.
  • Silver EPO works well with high deductible option and the HAS. Silver offers a 70 percent to thirty percent division of costs.
  • Bronze EPO provides low premiums and 60 percent coverage of essential benefits.

Outside Resources and Spending Limits

The Affordable Care Act put a cap on out-of-pocket expenses and deductibles. Once reached, these limits shifted the cost sharing onto the insurer; they must pay 100 percent of the costs. These reforms were badly needed in an industry in which insurers could add to the difficulty of reaching limits. The limits on expenses and deductibles are not complete.

They only apply to network resources and to essential medical services. Elective procedures and outside resources can still put consumers in a deep level of debt.

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The EPO is Right for Some Consumers

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Exclusive provider organization plans may be best for some consumers. They are simple and usually small organizations.

The EPO plan does not engage with outside resources; consumers must decide when to use outside resources and pay higher costs. The outside resource spending will not reduce plan deductibles or the plan’s limit on out-of-pocket expenses.

EPO plans work with cost sharing reduction assistance. Comparison shopping is an effective way to find the right health insurance plan for a family or individual. Comparison shopping can focus on the parts of a plan that matter most.

Consumers can use comparison shopping to focus on costs and expenses far beyond the monthly premiums. Enter your zip code below to find the best EPO plans in your state!