California Health Insurance Plan Options: HMO, PPO, EPO or POS

Posted: May 02, 2024

Everyone has to have health insurance now that the Affordable Care Act (ACA) is in place, but that doesn’t mean health care has gotten any less confusing. We tend to go with what we know or what we’ve always had when it comes to insurance coverage, but the reality is that you have options.

In California, health insurance plan options primarily include Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO). Other options include Exclusive Provider Organization (EPO) and Point-of-Service (POS) insurance plans, which are growing in popularity in California.

While all of these plans can provide the coverage you need, it’s essential to understand each option and compare them. Failing to grasp the differences between HMO, PPO, EPO and POS plans could lead to significant unexpected costs and disappointment in switching doctors due to a change in insurance coverage. These plans provide coverage, but there are substantial differences in how they work and how much they cost.

Whether you’re without insurance coverage and looking to purchase a plan shortly or just exploring your options as a Californian, we’ve provided some insight into HMOs, PPOs, EPOs, POSs and Kaiser Permanente.

The Difference Between EPO, HMO and PPO Plans
Health Maintenance Organization (HMO)
Advantages of an HMO
Preferred Provider Organization (PPO)
Advantages of a PPO
Exclusive Provider Organization (EPO)
Advantages of an EPO
What Is CA Kaiser Permanente?
Locations Covered in California by Kaiser Plans
Which of These California Health Insurance Plan Options Is Best for Me?
EPO, PPO and HMO Health Insurance Quotes in CA

The Difference Between EPO, HMO and PPO Plans

Of the different plan types — HMO, PPO and EPO — you have HMO and PPO at two opposite ends of the spectrum, with EPO and POS plans in the middle. It would be best to recognize the difference between HMO and PPO plans first. Then, you can see where EPO and POS fit in as a hybrid of the other two.

In general, the difference between HMO and PPO plans fall into a few categories:

1. Cost
2. Network
3. Control

The term “network” refers to a group of doctors, specialists, hospitals, labs and so on.

HMO plans are usually cheaper than PPO plans. They generally come with lower monthly premiums and out-of-pocket fees than PPOs. On the other hand, HMO plans have a more restricted network and less control when visiting specialists. PPO plans offer more flexibility regarding the network and control overseeing health care professionals. We’ve included specifics on each of these plan categories below.

Health Insurance Plans Available in California

Let’s dive deeper into each health insurance option and its advantages:

1. What Is an HMO?

HMO plans primarily revolve around a primary care physician (PCP). Your PCP is the doctor you see for annual physicals or when you’re sick. You can choose your primary care physician, but they must fall within the HMO’s local network of health care providers. Here are more specifications about HMOs:

1. For you, as the patient, this plan is very hands-off.
2. When you have a problem, you schedule an appointment with that PCP since they are treated as gatekeepers to your health care.
3. Everything is determined and coordinated through your primary care physician.
4. Primary care physicians will refer you to a specialist who also falls within the local network of health care providers.

But what happens when your primary care physician doesn’t think you need additional treatment? What if they believe your condition doesn’t warrant seeing a specialist? These situations can occur, and you should consider them. As long as you choose a PCP you trust, this likely won’t present any issues.

All of your health care is provided within a local network — if you see a provider outside of the network, you are responsible for paying the cost out of your pocket. If you have a doctor you like, anticipate a change in insurance coverage and are considering an HMO plan, make sure your doctor is in the HMO plan’s network. If not, you’ll have to switch doctors to have a PCP who falls within your plan’s network.

There is one exception to the HMO network rule. What if you’re on vacation and have an emergency? In this case, your HMO plan would usually cover the cost as if the emergency occurred in your network. However, it must be accepted by the insurance company as a true emergency.

What Are the Advantages of an HMO?

Overall, HMO networks are small, but there are two benefits of an HMO plan — both within the financial category. Since you’re working within the HMO network, you’ll probably never have to file a claim. Instead, your insurance company works directly with your health care providers. Also, HMO plans almost always cost less — they usually have lower monthly premiums and fewer out-of-pocket expenses.

2. What Is a PPO?

PPO plans fall on the opposite end of the spectrum and are almost always more expensive. However, with the additional cost comes added flexibility and freedom. There is still a network, but you can visit providers outside of your network if you want.

Out-of-network providers usually come with a higher out-of-pocket expense, but it’s possible to make that choice. Having the option to go out of network is often helpful for people who may have a doctor they like and don’t want to change when they get a new insurance provider.

With a PPO plan, there’s also more flexibility when selecting a PCP and seeing specialists. If you have a PPO plan, you are not required to have a PCP and can see any provider you choose, but you will ultimately save money by choosing a doctor in the network.

What Are the Advantages of a PPO Plan?

You don’t need a referral from your PCP to see a specialist. You can make that decision without seeing your primary care physician first. You can even see a specialist out of your network.

With all of this flexibility and freedom comes a higher price tag and a higher level of involvement in your health care, as you’re often the one scheduling and coordinating appointments. In contrast, a primary care physician oversees most of that responsibility in an HMO plan. If you choose to see a doctor outside of your network, you may also need to gather information and submit the claim to your insurance company to get part of the cost covered.

There are a few critical differences between HMO and PPO plans, and there is no one-size-fits-all solution. The best one for you ultimately depends on your preferences.

3. What Is an EPO?

EPO is increasingly popular in California. This option is a hybrid of the HMO and PPO plans. You’ll have many of the same freedoms with a PPO plan. Here is a list of features for the EPO plan:

1. You won’t need to commit to a PCP or have a PCP referral every time you want to go to a specialist.
2. Instead of having complete freedom to choose between a preferred network and an out-of-network provider, you’ll have an exclusive network you must use.
3. You’ll be covered out of network in the case of an emergency.

What Are the Advantages of an EPO?

Since you have a restriction of using an exclusive network with the EPO plan, it is often cheaper than a PPO plan. This makes EPO an excellent compromise for those seeking more control over their health care without paying significantly more in insurance premiums. Again, you must know whether your doctor and any specialists you see are in the network, as you’ll be responsible for all costs if you see a doctor outside of the EPO network.

4. What Is a POS Health Insurance Plan?

POS health insurance plans work differently from the rest. This arrangement lets you decide whether to stay in the network at each point you need health care services. The cost may vary depending on the health care provider or medical facility. Like EPOs, a POS combines the benefits of HMOs and PPOs. You can have a designated PCP who refers you to a network of specialists when needed. You may also receive care from non-network providers but incur higher out-of-pocket expenses like PPOs.

Your health insurance provider pays most of the bill when you visit an in-network provider and reach your health insurance deductible. The insurer will likely pay a much smaller portion of the bill when you go for out-of-network treatment. If you need emergency care, your POS will provide the highest level of coverage. It does not matter whether the facility is in or out of the network.

The difference between POS and EPO is that with EPO, you do need to work with a PCP or get a referral to see a specialist. That is not the case for POS.

What Are the Advantages of a POS Plan?

POS health insurance plans have many benefits. You have the freedom to visit out-of-network health professionals. You get wider access to doctors and hospitals, although you will pay more than in-network services. Generally, POS plans have lower out-of-pocket expenses. Also, POS health insurance offers copays for in-network providers on each visit instead of you paying the deductible before getting coverage. This arrangement is especially beneficial if you don’t have large medical bills.

Out-of-network providers will usually require you to meet the deductible before getting coverage. However, the annual cost is lower and there are limits on how much you pay throughout the year. When you exceed your out-of-pocket limit, the insurance covers visitations and treatments.

What Is Kaiser Permanente?

California is home to Kaiser Permanente, one of the country’s oldest and largest HMOs. Founded in 1945 and headquartered in Oakland, California, the Kaiser Foundation Health Plan, Inc., is an insurance provider that serves people in:

1. California
2. Colorado
3. Georgia
4. Hawaii
5. Virginia
6. Maryland
7. Oregon
8. Washington
9. The District of Columbia

The organization also backs Kaiser Foundation Hospitals and the Permanente Medical Group, Inc., a physician group practice of over 9,000 physicians. Kaiser Permanente has created its own branded network.

As an HMO, Kaiser has a local network of providers in California that includes PCPs, laboratories, hospitals and pharmacies. If your region does not have a Kaiser facility, you can get care from places Kaiser has contracted with. They may not carry the Kaiser name, but they are considered part of the Kaiser network.

The Kaiser network serves millions of Californians through an extensive physician network, hundreds of medical offices and nearly 40 hospitals throughout northern and southern California. You can view Kaiser locations through an online search.

California Locations Covered by Kaiser Plans

The HMO breaks down the areas it serves in the state’s regions. In Northern California, Kaiser serves:

• Central Valley
• Roseville
• Santa Cruz
• Sacramento
• San Jose
• Santa Clara
• East Bay
• Fresno
• Greater San Francisco
• Greater Southern Alameda
• Marin/Sonoma
• Napa/Solano
• Diablo
• Redwood City
• South Sacramento

In Southern California, Kaiser serves:

• Coachella Valley
• Orange County
• Kern County
• San Diego County
• Tri-Central Area
• Inland Empire
• Metro Los Angeles/West Los Angeles
• West Ventura/Valleys

You may have heard of Kaiser Permanente’s campaign called “Thrive.” This wellness campaign emphasizes preventive care and includes 24/7 access to nurses over the phone, disease management programs, healthy lifestyle programs and class and fitness program discounts, among others.

In some ways, Kaiser Permanente takes HMO plans to a new level, having its medical groups and hospitals at its core rather than affiliating with various health systems. However, it is still an HMO plan at its base and therefore comes with the restrictions that define an HMO plan — having to stay within the network and managing all of your care through first going to see a PCP.

Which of These California Health Insurance Plan Options Is Best for You?

The first step is looking at your options. Not all four plans are offered everywhere, so it’s best to start by looking at what’s available to you. If applicable, you can start entering some simple information about yourself and your family on our website. Requesting a free quote will give you a list of options, including the plan type. Once you know what plans are available, you can consider your priorities.

There is no winning plan but one that will better fit you and your family. Consider how important each of these factors is:

• Cost: If you’re on a strict budget and finding the cheapest health care option is your priority, an HMO plan will likely be your best fit. You could also explore EPO or POS plans to balance affordability and control.
• Network: If you want some of your costs covered — whether you see a doctor in or out of the network and you have room in your budget for a higher premium cost — a PPO or POS plan will probably be better for you.
• Control: Determine how you feel about your PCP managing your care. If you have strong opinions about that, it will be a deciding factor. If you like the idea of your primary care physician managing your care, an HMO plan will be a good fit for you. If you’d like to avoid referrals from your PCP when you need or want to see a specialist, a PPO or EPO plan will probably be a better fit.

When considering your options, remember that each type of insurance plan in California will provide you with the necessary health care services. The way they deliver those services just looks different. Individuals and families come in all shapes and sizes and so do insurance plans.

Frequently Asked Questions (FAQs)

We’ll wrap things up by answering some common questions about the different health insurance plans in California:

Is a POS Plan the Same as an HMO?

POSs and HMOs are different plans. HMO gives you access to a primary care physician you consult for your medical needs. You can select a PCP, but they must be within the plan’s local network. POS also enables access to a primary care physician, but you can consult one out of network, although you’ll likely pay more.

How Does a POS Plan Work?

POS plans combine the elements of PPO and HMO. You get a designated PCP to refer you to network specialists like HMOs. Like PPOs, you can get non-network care with higher out-of-pocket expenses. If you purchase a POS plan, you may also be responsible for coinsurance, copayments and an annual deductible.

What Are the Differentiating Factors Between HMOs, PPOs, EPOs and POSs?

There are six differentiating factors between the various health insurance plans:

1. The requirement of a primary care physician
2. The requirement of referral to see a specialist or get other services
3. The requirement of preauthorization when accessing health care services
4. The cost-sharing amount when you use your health insurance
5. Whether the health insurance plan will pay for out-of-network care
6. Whether you have to file insurance claims and do paperwork

EPO, PPO and HMO Health Insurance Quotes in California

Now that you have some background information on the different plans, you can get an insurance quote. Whether you’re currently uninsured and need coverage or you want to shop around, Health for California’s online tool allows you to get free health insurance quotes instantly. You can see all of your options and find out if you qualify for government assistance.

All you need to do to get started is enter your gender, date of birth and zip code. The free quotes you get will provide all the details you need, including the plan category, the carrier name, the full price of the plan, the price you pay, a link to view benefits and more. Get started by requesting a free quote today!