Definition:
An Exclusive Provider Organization (EPO) is a healthcare plan that manages the costs of services from a network of healthcare providers.
How does an Exclusive Provider Organization work?
An Exclusive Provider Organization (EPO) covers the costs of services from a network of healthcare providers. Typically, it does not contribute to the costs of out-of-network services unless they are for emergency care. You may need to choose a primary care physician and get referrals from them to see specialists, but this is not always required. Exclusive provider organizations tend to offer lower monthly payments in exchange for higher cost-sharing.
Example of an Exclusive Provider Organization
Suppose you have an EPO plan with a $2000 maximum deductible and no cost-sharing with an 80% coverage percentage and a $7000 maximum out-of-pocket expense. You incur covered costs of $10000 after an emergency visit, all from providers within your network. You will pay $2000 to meet the deductible, leaving you with $8000 in additional expenses. From this amount, you will pay 20% in coverage, which is $1600, with the remaining amount covered by the insurance company for a total of $3600. If you spend an additional $3400 on covered medical services that year, you will reach your maximum out-of-pocket expense of $7000. At this point, the insurance company will pay 100% of covered service costs for the remainder of the year.
Advantages and Disadvantages of an Exclusive Provider Organization
Advantages:
- Low monthly expenses
- Large networks
- Plans available without a primary care physician or referrals
Disadvantages:
- You may have high annual deductibles
- No out-of-network coverage
Comparison of Exclusive Provider Organization, HMO, PPO, and POS
| Plan Type | EPO | HMO | PPO | POS |
|---|---|---|---|---|
| Monthly Costs | Low | Lower than EPO | Higher than EPO | Higher than EPO |
| Out-of-Network Coverage | No | No | Yes | Sometimes |
| Referrals Required | Sometimes | Yes | No | Yes |
Frequently Asked Questions
Why is an Exclusive Provider Organization called “exclusive”?
An Exclusive Provider Organization is called “exclusive” because the coverage is limited to a specific network of service providers. The insurance coverage is “exclusive” to those providers.
Why choose an Exclusive Provider Organization?
An Exclusive Provider Organization may be a good health insurance option if you know you can commit to using a specific network of service providers. Additionally, you may want to choose an Exclusive Provider Organization if you do not necessarily need a primary care physician (PCP); HMO plans offer similar coverage, and often at lower costs, but you are more likely to need a PCP.
Source: https://www.thebalancemoney.com/what-is-an-exclusive-provider-organization-epo-5210794
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