If you have an HMO or EPO, you might not be as protected as you think.
That’s not to say these health plans are bad: They can be great (not to mention affordable) options for many people. But because they’re what’s called “narrow-network” plans, they do require a little more thinking ahead on your part to find and fill gaps in your coverage. Often, that includes adding in supplemental insurance benefits.
Here’s what you need to know to stay protected.
What Are HMOs and EPOs, Anyway?
Shopping for health insurance can feel like playing an unwinnable word jumble — and it starts to get overwhelming quickly. Still, it’s a good idea to do your homework and figure out exactly what those letters mean before you pick your plan.
Generally, most people with health insurance choose one of three options:
- Health maintenance organizations (HMOs) provide limited or no coverage if you see an out-of-network doctor, pharmacy, hospital or other provider. In order to see specialists, you need a referral from your primary care doctor.
- Exclusive provider organizations (EPOs) also offer limited or no coverage if you see an out-of-network provider. However, they don’t require you to have a referral to see specialists.
- Preferred provider organizations (PPOs) may cost less if you see in-network providers, but they still provide out-of-network coverage if needed. Whether you stay in your network or go outside of it, you don’t need a referral from your doctor.
Even though they may not cover out-of-network care, in many cases HMOs and EPOs are attractive to insurance shoppers because they tend to have lower premiums. That’s not the only reason people buy these plans, though. Some don’t have a choice.
For instance, if you buy your insurance on your own, rather than through an employer, narrow network plans like HMOs and EPOs may be your only option. For those who buy insurance on Healthcare.gov, this means you: Among 2019 plans on the marketplace, 72% had a narrow network.
What’s So Hard About Staying in Network?
You might think that if you have a narrow-network plan, you’ll be fine as long as you just stay in network. While that may be true, it’s not always all that realistic.
Say you need surgery, lab work or an MRI. Checking that the hospital and doctor are within your network is one thing, but what about all the behind-the-scenes providers — like the anesthesiologist, lab tech or radiologist? Or what happens when your provider works with an outside lab or radiology group?
It’s a tall order to confirm that every single provider, lab, pharmacy, doctor and venue involved in your care will be within your network, even when you put in the effort.
People who have a chronic disease and others with more complex health care needs have to keep track of even more moving parts. Even the smallest oversight can cost a lot when your insurance doesn’t cover out-of-network care. Though insurance plans have out-of-pocket limits on what you pay after meeting the deductible, those protections may not be available for care sought outside your narrow-network plan.
Such circumstances have landed people in a heap of medical debt. Luckily, there are ways to help offset those costs.
How Can a Supplemental Plan Help?
Designed to act alongside regular health insurance, these plans help fill the coverage gaps inherent in narrow-network policies. How do they do it? These plans pay you cash — without paying any attention to networks. In fact, supplemental plans have no network. As a bonus, you can use your benefits for literally anything, from medical expenses to rent.
Supplemental plans fall into different groups, so you’ll still have some deciding to do. But for the best protection, consider getting a mix of these three plans to go along with your HMO or EPO:
- Hospital indemnity insurance,which pays out benefits for certain hospitalizations.
- Critical illness insurance,which goes into action for certain illnesses, such as cancer or heart disease.
- Accident insurance,which pays benefits for certain accidents, like breaking a leg or burning your hand.
Because supplemental plans generally cost much less than traditional health insurance, they’re great budget-friendly options to bundle with a narrow-network plan. For some people, that mighty combo may give them the best of both worlds: the lower premiums of an HMO or EPO, plus an out-of-network safety net if they need it.
Above all, though, supplemental insurance benefits can help give you a little more peace of mind and confidence in your plan selection, especially if you have no choice but a narrow-network plan. While an HMO or EPO may not be a bad choice, leaving coverage gaps wide open certainly isn’t a good one. Protect yourself (and your pocketbook) by supplementing your policy mix in advance.