Nationwide, small businesses and individuals seeking health insurance can choose from several types of plans, including Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Exclusive Provider Organizations (EPOs).
Currently, there are no Affordable Care Act-qualified PPOs or EPOs sold in the individual and family market in Colorado, though they are available in the small group market. We’re covering each of these major managed care business models and how they work, so business owners and employees as well as those buying insurance through the individual market can make an informed decision.
HMOs typically require members to select a primary care physician and get referrals for specialists, offering lower premiums but restricted to a network of providers. PPOs provide more flexibility, allowing members to see any healthcare provider, though seeing providers outside the network incurs higher costs.
EPOs are similar to HMOs in that they restrict members to a network of providers but do not usually require referrals to see specialists. As health insurance costs rise, some Coloradans are turning to health sharing plans as an alternative.
Health sharing is not insurance, but is a cooperative group that shares healthcare costs among members based on religious or ethical alignment, offering a different approach to managing healthcare expenses.
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How Each Plan Works
HMOs (Health Maintenance Organizations)
HMOs are managed care organizations. These function by contracting with select providers that agree to offer services at discounted rates in exchange for a steady stream of patient referrals from the plan.
With HMOs, you’ll be assigned a primary care physician (PCP) who coordinates all healthcare services. HMO members must get a referral from their PCP before the plan will pay for them to see a specialist for non-emergency care.
HMOs tend to be lower-cost plans. Much of their focus is on controlling costs through preventive care and limiting doctors’ fees.
PPOs (Preferred Provider Organizations)
Like HMOs, PPOs function by contracting with select providers who agree to provide services at a discount in exchange for a steady stream of referrals.
With a PPO, you’ll also be assigned a primary care physician. But unlike HMOs, PPOs don’t require you to get a referral before you can see a specialist.
This flexibility, however, comes at a higher cost. For instance, the Anthem Blue Cross Blue Shield PPO in Colorado offers extensive coverage but encourages members to stay within their network by offering lower copays and deductibles for in-network services.
As noted, PPOs in Colorado are available to small groups, but there are no PPO plans currently available in the individual/family market.
EPOs (Exclusive Provider Organizations)
EPOs combine elements of PPOs and HMOs. They do not require referrals for specialists but restrict coverage to network providers, except in emergencies.
Colorado HealthOP offers competitive premiums for EPO plans focused on in-network care.
Here is a table comparing the key features of Preferred Provider Organizations (PPOs), Health Maintenance Organizations (HMOs), and Exclusive Provider Organizations (EPOs) in Colorado.
Managed Care Plans at a Glance
| Feature | PPOs | HMOs | EPOs |
|---|---|---|---|
| Flexibility | High flexibility to use out-of-network care | Must use in-network care except in emergencies | Services covered only if using in-network providers |
| Referral Requirement | No referral is needed to see a specialist | A referral is required to see a specialist | No referral is needed to see a specialist |
| Premiums | Generally higher premiums | Generally lower premiums | Lower premiums than PPOs |
| Out-of-Network Care | Covers a portion of out-of-network care costs | Excludes most out-of-network care | Does not cover out-of-network care |
| Provider Choice | More choice of doctors and hospitals | Limited to contracted providers | Limited to in-network providers |
Referrals and Out-of-Network Coverage
Referrals: HMOs require a referral from your PCP to see a specialist, whereas PPOs and EPOs do not.
Out-of-Network Coverage: PPOs cover out-of-network care at a higher cost. EPOs and HMOs generally do not cover out-of-network services except for emergency care.
Emergency vs. Non-Emergency Care
In emergencies, all plans provide coverage regardless of the network. For non-emergency care, PPOs offer the most flexibility, allowing visits to out-of-network providers at a higher cost.
HMOs and EPOs are more restrictive, generally limiting care to network providers unless it’s an emergency.
Narrow Networks
Certain HMO plans in Colorado are highly regional, often available only in urban areas like Denver and Boulder, with limited services outside these regions.
The Health Sharing Alternative
If you’re looking for a more affordable alternative to traditional health insurance products, health sharing plans may be just the ticket.
Health sharing plans are community-based, non-insurance alternatives that allow members to share medical costs with fellow members by forming a non-profit association.
Health sharing costs are typically around 40 to 50 percent lower compared to unsubsidized health insurance costs and can save members thousands of dollars per year.
The primary disadvantages: they don’t immediately share costs to treat pre-existing conditions, and don’t qualify for a subsidy under the Affordable Care Act.
However, even without the tax deduction, health sharing can still often save a significant amount of money each year. If you’re in good health and don’t currently qualify for a subsidy, joining a health sharing plan may be an excellent decision.
For free, personalized help in finding the health plan that works best for you or your small business – whether it’s an HMO, PPO, EPO, or a non-insurance health sharing plan, you can contact a ColoHealth Personal Benefits Manager.
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Conclusion
Choosing the right health insurance plan in Colorado depends on individual healthcare needs, financial situation, and preferences for provider access.
While HMOs offer cost efficiency and a focus on preventive care, PPOs provide flexibility at a higher cost. EPOs strike a balance between the two.
Let us guide you through the options in the health insurance landscape more effectively, helping you choose a plan that aligns with your healthcare priorities with one of our Personal Benefits Managers, the consultation is always free.
For Further Reading: Can I Use an HSA With a Health Sharing Plan in Colorado?|Colorado Health Insurance Showdown: Kaiser vs. Anthem|How Health Sharing Saves Money for Colorado Residents
Misty Berryman is a Personal Benefits Manager at ColoHealth. Her aim is to help you make smart and informed healthcare coverage decisions that will fit your needs and budget. Read more about Misty on her Bio page.
