What is the difference between an HMO and a PPO?

An HMO usually requires a primary care doctor and referrals, and covers only in-network care except emergencies. A PPO lets you see any provider, with lower costs in network, and doesn't require referrals.

Is an EPO better than a PPO?

An EPO costs less but generally covers no out-of-network care except emergencies. A PPO costs more and covers out-of-network care at a higher cost share.

Why are most marketplace plans HMOs and EPOs?

Closed networks let insurers negotiate lower prices and keep premiums down. About 79% of 2026 marketplace plans are HMOs or EPOs.

HMO vs. PPO vs. EPO: which should your company offer?

The plan type decides which doctors your team can see. PPOs cover out-of-network care; HMOs and EPOs generally don't, except emergencies. On employer plans, PPOs are still the most common choice. On the individual market, about 79% of 2026 plans are HMOs or EPOs. If you're hiring people who already have doctors they like, this matters more than almost anything else.

By Aditya Jain, MD, Cofounder and COO, PresciencePublished October 10, 2026

Get an instant quote Book a call with an expert

Workers on employer PPOs: 46% (KFF, 2025)
2026 marketplace plans that are PPOs: About 15%
Marketplace HMOs + EPOs: About 79%
Prescience network: Broad national PPO + direct contracts

HMO vs. PPO vs. EPO: which should your company offer? (Prescience guide by Aditya Jain, MD)

The four plan types

How network types differ
	HMO	EPO	PPO	POS
Out-of-network coverage	Emergencies only	Emergencies only	Yes, at higher cost	Yes, with referral
Referrals to specialists	Usually required	Usually not	Not required	Usually required
Primary care doctor required	Usually	No	No	Usually
Premium	Lowest	Low	Highest	Middle

What matters for employees

Closed networks work well when the network is good and people are healthy. The trouble starts with the unexpected: a rare condition that needs a specialist outside the network, a child who needs a pediatric subspecialist, or an illness while traveling. Having trained in medicine, I've seen how much a referral denial or an out-of-network bill can delay care.

That's one reason I'm wary of moving teams to the individual market. About 46% of 2026 marketplace plans are HMOs and 33% are EPOs; only about 15% are PPOs.

Moving a team to the individual market usually means trading PPOs for closed-network plans.

Which to offer

Distributed team or people with established doctors: a PPO.
Everyone in one metro with a strong integrated system: an HMO can be good value.
Budget-constrained but want some flexibility: an EPO with a broad network.

Prescience plans typically give members a broad national PPO network through the carrier, plus our direct-contract providers and a care team that helps people pick well.

See what your team would pay with Prescience

Answer a few questions about your team and get a quote in about 60 seconds, or talk it through with one of our benefits experts.

Get an instant quote Book a call with an expert

Frequently asked questions

Sources

This page is general information, not legal or tax advice. Plan terms, prices and savings depend on your company, your quote and your plan documents, which control if they differ from this page.