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

Source: https://www.getprescience.com/guides/hmo-vs-ppo-vs-epo
Author: Aditya Jain, MD, Cofounder and COO, Prescience
Published: 2026-10-10
Updated: 2026-10-10

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.

- **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

## 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.

_Chart: Bar chart comparing PPO prevalence: 46% of workers on employer plans are in PPOs, while only 15% of 2026 marketplace plans are PPOs._

## 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.

## Frequently asked questions

**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.

## Sources

- [Healthinsurance.org, HMO, PPO, EPO or POS (2026 marketplace plan types, from HHS QHP landscape data)](https://www.healthinsurance.org/blog/hmo-ppo-epo-or-pos-choosing-a-managed-care-option/)
- [KFF, 2025 Employer Health Benefits Survey](https://www.kff.org/health-costs/2025-employer-health-benefits-survey/)