HMO vs. PPO vs. EPO: Health Insurance Network Types Explained

When you shop for health insurance, the plan's network type determines which doctors you can see, whether you need referrals, and what happens if you go outside the network. The four most common network types — HMO, PPO, EPO, and POS — each handle these rules differently, and choosing the wrong one can cost you thousands of dollars or lock you out of the providers you rely on. This guide breaks down exactly how each network type works so you can make an informed choice.

What Is a Health Insurance Provider Network?

A provider network is a group of doctors, specialists, hospitals, labs, and pharmacies that have signed contracts with an insurance company to provide services at pre-negotiated rates. When you visit an in-network provider, you pay the discounted rate your insurer has arranged. When you visit an out-of-network provider — if your plan allows it — you typically pay significantly more because there is no negotiated discount.

Every health insurance plan is built on one of several network structures. The network type you choose affects three things that matter most to your wallet and your experience:

• Provider choice: Can you see any doctor, or must you stay within a specific list?
• Referral requirements: Do you need permission from a primary care physician before seeing a specialist?
• Out-of-network coverage: Will your plan pay anything if you go outside the network?

HMO (Health Maintenance Organization)

An HMO is the most structured network type. It requires you to choose a primary care physician (PCP) who serves as the gatekeeper for all your healthcare. If you need to see a specialist — a cardiologist, dermatologist, orthopedic surgeon, or anyone beyond your PCP — you must first get a referral from your primary care doctor. Without that referral, the plan will not cover the visit.

How an HMO works:

• You select a PCP from the plan's network when you enroll
• Your PCP coordinates your care and writes referrals for specialists
• All non-emergency care must come from in-network providers
• Out-of-network care is not covered except in true emergencies

Pros:

• Typically the lowest monthly premiums of any network type
• Lower out-of-pocket costs, including copays and deductibles
• Your PCP coordinates all your care, which can reduce duplicate tests and conflicting treatments
• Predictable costs make budgeting easier

Cons:

• You need a referral every time you want to see a specialist
• No out-of-network coverage means zero financial protection if you see a non-network provider
• Smaller provider networks can limit your choices, especially in rural areas
• Changing your PCP or getting urgent specialist care can involve extra steps

PPO (Preferred Provider Organization)

A PPO is the most flexible network type. You can see any healthcare provider — in-network or out-of-network — without needing a referral. There is no requirement to choose a primary care physician, and you can book directly with specialists whenever you want. The trade-off is that PPOs are typically the most expensive plan type in terms of monthly premiums.

How a PPO works:

• You can see any provider at any time without a referral
• In-network care is covered at the highest benefit level with lower copays and coinsurance
• Out-of-network care is covered, but with a separate (higher) deductible and higher coinsurance — often 40 to 50 percent instead of 20 percent
• You may face balance billing from out-of-network providers who charge more than the plan's allowed amount

Pros:

• Maximum flexibility — see any doctor, any specialist, anytime
• No referrals required for specialist visits
• Out-of-network coverage provides a financial safety net if you need care from a non-network provider
• Typically broader provider networks than HMOs or EPOs

Cons:

• Highest monthly premiums of any network type
• Out-of-network costs can still be very high despite partial coverage
• Without a coordinating PCP, it is up to you to manage your own care across multiple providers
• Balance billing from out-of-network providers can create unexpected bills

EPO (Exclusive Provider Organization)

An EPO is a hybrid that takes the no-referral convenience of a PPO and combines it with the in-network-only restriction of an HMO. You can see specialists directly without asking your primary care doctor first, but all your care must come from in-network providers. If you go out of network for anything other than an emergency, you pay the entire bill yourself.

How an EPO works:

• You do not need a referral to see an in-network specialist
• All care must come from in-network providers to be covered
• Emergency care is covered regardless of network status
• No out-of-network benefits for non-emergency services

Pros:

• No referrals needed, giving you more direct access to specialists than an HMO
• Premiums are typically lower than a PPO because the insurer negotiates rates with a defined network
• Simpler plan structure with one set of in-network costs and no confusing out-of-network tier

Cons:

• Zero out-of-network coverage means you are fully responsible for non-emergency care from non-network providers
• If your preferred doctor leaves the network mid-year, you may need to switch providers or pay out of pocket
• Network size may be narrower than a PPO, particularly for specialized care

POS (Point of Service)

A POS plan is the least common of the four types, but it offers a unique blend. Like an HMO, you choose a primary care physician and need referrals to see specialists. Like a PPO, you can go out of network — though at a significantly higher cost. Think of it as an HMO with an escape valve for situations where you need a provider outside your network.

How a POS works:

• You select a PCP who manages your care and provides referrals
• In-network care is covered at the standard benefit level
• Out-of-network care is partially covered but with higher deductibles and coinsurance
• Your PCP referral may be required even for out-of-network specialists, depending on the plan

Pros:

• Coordinated care through a PCP, similar to an HMO
• Some out-of-network coverage provides a safety net that HMOs and EPOs lack
• Premiums are usually lower than a PPO

Cons:

• Referrals are required, adding an extra step before specialist visits
• Out-of-network costs are substantially higher, often with a separate deductible
• Less common than other plan types, so options may be limited in your area

Side-by-Side Comparison: HMO vs. PPO vs. EPO vs. POS

Here is a quick reference comparing the four network types across the factors that matter most.

Referrals required: HMO: Yes. PPO: No. EPO: No. POS: Yes.

PCP required: HMO: Yes. PPO: No. EPO: No (usually). POS: Yes.

Out-of-network coverage: HMO: No (emergencies only). PPO: Yes (at higher cost). EPO: No (emergencies only). POS: Yes (at higher cost).

Typical premium level: HMO: Lowest. PPO: Highest. EPO: Low to moderate. POS: Moderate.

Flexibility: HMO: Most restricted. PPO: Most flexible. EPO: Moderate. POS: Moderate.

How Costs Differ Between Network Types

The network type you choose has a direct impact on every dollar you spend on healthcare. Here is how the costs typically break down.

Monthly premiums. According to the KFF 2025 Employer Health Benefits Survey, workers enrolled in HMO plans pay an average of 10 to 20 percent less in premiums than those in PPO plans. EPO premiums fall between the two, while POS plans are comparable to EPOs. On the ACA marketplace, HMO and EPO plans dominate the lower-cost bronze and silver tiers, while PPOs are more common in gold and platinum tiers.

Deductibles and copays. HMOs tend to have lower deductibles and more services covered by flat copays before the deductible. PPO plans often have higher deductibles, and out-of-network services may have a completely separate deductible that can be two to three times the in-network amount.

Out-of-network costs. With HMOs and EPOs, out-of-network non-emergency care costs you 100 percent of the bill. With PPOs and POS plans, out-of-network care is partially covered, but you can expect to pay 40 to 50 percent coinsurance after meeting a separate, higher deductible. You may also face balance billing, where the provider charges you the difference between their rate and the insurer's allowed amount.

Out-of-pocket maximums. All ACA-compliant plans cap your in-network out-of-pocket spending at $9,450 for individuals and $18,900 for families in 2026. However, out-of-network spending does not count toward this cap on most plans, which means PPO and POS members who use out-of-network care could face effectively unlimited out-of-pocket costs on the non-network side.

Referral Requirements Explained

Whether or not you need a referral to see a specialist is one of the most practical daily differences between plan types. Here is what to expect.

HMO and POS plans require referrals. Before you can see a specialist, your primary care physician must evaluate you and determine that a specialist visit is necessary. Your PCP then issues a referral, which authorizes the specialist visit. Without this referral, the plan typically will not cover the specialist's charges. Some HMOs allow standing referrals for patients with chronic conditions who need to see the same specialist regularly.

PPO and EPO plans do not require referrals. You can call a specialist directly and book an appointment without involving your primary care doctor. This saves time and eliminates the extra office visit, but it also means no one is coordinating your overall care unless you take that on yourself.

Important distinction — referrals vs. prior authorization. Even plans that do not require referrals may require prior authorization for certain procedures, tests, or medications. Prior authorization means the insurance company must approve the service in advance. This applies to all plan types and is separate from the referral process.

Out-of-Network Coverage Rules

Understanding what happens when you go outside your plan's network is critical because this is where the biggest surprise bills come from.

HMO and EPO: No out-of-network coverage. If you see an out-of-network provider for non-emergency care, you pay 100 percent of the charges. The only exception is emergency care, which the Affordable Care Act requires all plans to cover at in-network rates regardless of which hospital or emergency room you go to. After you are stabilized, however, the plan may require you to transfer to an in-network facility for continued care.

PPO and POS: Partial out-of-network coverage. These plans cover out-of-network care, but at a reduced benefit level. You will typically face a separate out-of-network deductible (often $3,000 to $6,000 for individuals), higher coinsurance (40 to 50 percent instead of 20 percent), and a higher or even unlimited out-of-pocket maximum. Additionally, the plan bases reimbursement on an allowed amount, which may be less than what the provider charges — and you are responsible for the difference.

The No Surprises Act. Since January 2022, the federal No Surprises Act protects patients from unexpected balance bills in certain situations. If you receive emergency care, or if an out-of-network provider treats you at an in-network facility without your knowledge, you cannot be billed more than in-network cost-sharing amounts. This law applies to all plan types and provides important protection against the most common surprise billing scenarios.

Which Network Type Is Best for You?

There is no single best network type — the right choice depends on your health needs, budget, and how important provider flexibility is to you. Here are guidelines for different situations.

Choose an HMO if:

• Saving money on premiums is your top priority
• You are comfortable with a single doctor coordinating your care
• Your preferred doctors and hospitals are already in the HMO network
• You do not travel frequently or need care in multiple regions

Choose a PPO if:

• You want the freedom to see any doctor or specialist without restrictions
• You see specialists regularly and do not want to deal with referrals
• You travel often or split time between multiple locations
• You want out-of-network coverage as a safety net and can afford higher premiums

Choose an EPO if:

• You want direct specialist access without referrals but do not need out-of-network coverage
• You live in an area with a strong in-network provider selection
• You want lower premiums than a PPO but more flexibility than an HMO

Choose a POS if:

• You want a PCP to coordinate your care but also want the option to go out of network when needed
• You are willing to pay moderate premiums for a balance of structure and flexibility
• You have a specific out-of-network specialist you need occasional access to

How to Check If Your Doctor Is In-Network

Verifying that your current doctors are in a plan's network before you enroll is one of the most important steps in choosing health insurance. An excellent plan at a great price is worthless if it does not include the providers you need. Follow these steps.

1. Use the insurer's online provider directory. Every insurance company maintains a searchable directory on its website. Search by your doctor's name, medical group, or specialty. Make sure you are searching the directory for the specific plan you are considering, not just the insurer in general — the same company can offer multiple plans with different networks.
2. Call your doctor's office directly. Online directories can be out of date. Call the billing department at each provider's office and ask whether they participate in the specific plan and network you are considering. Confirm the plan name and network name, not just the insurance company.
3. Check hospitals and facilities. Verify that the hospitals closest to your home and workplace are in-network. Also check any surgical centers, imaging facilities, and labs you might use. A hospital can be in-network while individual doctors who practice there — such as anesthesiologists or radiologists — are not.
4. Verify pharmacy participation. If you take prescription medications, confirm that your preferred pharmacy is in the plan's pharmacy network. Some plans offer better pricing at specific pharmacy chains or through mail-order programs.
5. Use the marketplace tool. If you are shopping on HealthCare.gov or a state marketplace, the plan comparison tool lets you enter your doctors and medications before filtering results. Plans that include your providers will be flagged, making it easier to narrow down your options.

The Bottom Line

Your health insurance network type shapes nearly every aspect of your healthcare experience — from which doctors you can see to how much you pay at every step. HMOs offer the lowest costs but the least flexibility. PPOs provide the most freedom but at the highest price. EPOs split the difference by eliminating referrals while keeping you in-network. POS plans add out-of-network access to an HMO-style coordinated care model.

The best approach is to start with your providers. Check which plans include the doctors and hospitals you already use, then compare the total costs — premiums, deductibles, copays, and coinsurance — across those options. If all your providers are available in an HMO or EPO, you can save significantly on premiums without sacrificing the care you need. If provider flexibility or out-of-network access is essential, a PPO or POS may be worth the extra cost.

No matter which network type you choose, always verify your providers are in-network before you enroll, understand your plan's referral and prior authorization requirements, and know exactly what happens if you need care outside the network. These three steps will protect you from the surprise bills and coverage gaps that catch millions of Americans off guard every year.