HMO vs PPO vs EPO: Understanding Health Insurance Networks (2025)

Got an email from my friend Dana last open enrollment asking “what’s the difference between HMO and PPO because my work offers both and I’ve been picking randomly for three years.”

Three years. Randomly. She’s probably been paying more than she needs to. Or she’s been stuck with a plan that doesn’t work for how she uses healthcare. Either way not great.

These alphabet soup plan types actually matter. The wrong choice can cost you thousands or leave you without access to doctors you want. Let me explain the differences in a way that actually makes sense.

HMO (Health Maintenance Organization)

Most restrictive but usually cheapest.

You pick a primary care physician (PCP). Want to see any other doctor? You need a referral from your PCP first. Want to see a specialist? Referral. Dermatologist? Referral. Pretty much anything beyond basic primary care needs your PCP to say “yes go ahead.”

Also: network is everything. HMOs typically don’t cover ANY out-of-network care except emergencies. If you see a doctor not in the HMO network, you pay full price yourself. All of it.

Why would anyone choose this? Because it’s cheaper. Lower lower premiums, lower health insurance terms usually, lower out-of-pocket costs costs overall. If you don’t mind jumping through hoops and staying in-network, HMO saves money.

Good for: people who are generally healthy, don’t see specialists regularly, and have good in-network options nearby.

PPO (Preferred Provider Organization)

Most flexible but most expensive.

No PCP required. No referrals needed. Want to see a specialist? Just go. Want to see a doctor outside the network? You can—you’ll just pay more for it.

PPOs have in-network and out-of-network coverage. In-network is cheaper. Out-of-network costs more but at least there’s SOME coverage. You won’t pay full price yourself.

Why choose PPO? Flexibility. You want to see whoever you want whenever you want without asking permission. Worth the higher premium for some people.

Good for: people who see specialists regularly, travel a lot and might need care in different areas, or just hate dealing with referral bureaucracy.

EPO (Exclusive Provider Organization)

Weird hybrid that exists to confuse you probably.

Like PPO—no referrals needed, no PCP requirement. But like HMO—no out-of-network coverage except emergencies. So you have flexibility within network but zero coverage outside it.

Usually priced between HMO and PPO. Cheaper than PPO but more expensive than HMO.

Good for: people who want PPO-style flexibility but don’t need out-of-network coverage and want to save on premiums.

POS (Point of Service)

Another hybrid. Like HMO you have a PCP and need referrals. But like PPO you can go out-of-network and still get some coverage.

Less common. Priced all over the place.

Honestly these are confusing and not offered as often so I’m not going to dwell on them.

How to actually choose

Ask yourself these questions:

Do I have doctors I want to keep seeing? Check if they’re in-network for each plan option. If your specialists aren’t in-network for the HMO, that plan doesn’t work for you no matter how cheap it is.

Do I hate dealing with referrals? If yes, HMO will annoy you. PPO or EPO.

Do I travel a lot or live in a rural area? PPO with out-of-network coverage gives you more options.

Am I generally healthy and rarely see doctors? HMO is probably fine and saves money.

Do I have chronic conditions requiring specialists? PPO or EPO so you don’t need referrals every time.

The real cost comparison

Don’t just look at premium. Look at total potential cost.

HMO might have $200/month premium but $3,000 deductible. PPO might have $350/month premium but $1,500 deductible. If you’re going to hit your deductible, the PPO might actually cost less overall.

Also: what’s the out-of-pocket max? If you have a major health issue, you want that number to be reasonable.

Dana’s situation

Turned out she sees a psychiatrist monthly and an endocrinologist quarterly. Her HMO required referrals every time which meant she was constantly dealing with her PCP’s office to get paperwork. Annoying and time-consuming.

Switched to EPO. No referrals needed. Her specialists were in-network anyway so no out-of-network issue. Slightly higher premium but saved hours of referral hassle.

She’d been fighting with her HMO for three years because she picked randomly during open enrollment and never thought about it again.

Collision is doing her thing where she perches on my shoulder while I type which is cute but also her claws are sharp—anyway. Don’t pick randomly. Think about how you actually use healthcare. Check if your doctors are in-network. Factor in the referral thing. Then choose.