What is a PPO?
A Preferred Provider Network or a PPO is a network of doctors, hospitals and other health care providers who agree to provide health care at reduced rates to the members. Sometimes referred to as a Participating Provider Organization or a Preferred Provider Option, they are subscription-based medical care arrangements. PPO’s first started being used as competitors to HMO’s in the late 70’s to provide the public with more options.
How does a PPO health plan work?
Very similar to an HMO most PPO’s will have an annual deductible to pay before your plan will cover your medical bills as well as a co-pay. The deductibles and co-pays tend to be slightly higher for most PPO plans.
As a member of a PPO health plan, you will see the most benefit by using your insurance companies in-network providers. While there is out-of-network coverage it will be at a reduced percentage compared to the in-network providers.
Providers and insurers in the PPO negotiate fees and schedules for services. A reasonable and customary fee schedule is used for out-of-network claims. If the claim submitted is more than the reasonable and customary fee amount, you will be responsible for the difference, and in some cases you may not receive coverage at all.
Benefits of a PPO?
In the past PPO’s were the most common choice for most families for many reasons. But if we had to sum up the benefits of a PPO in one word it would be “flexibility.” Between no PCP, no referrals, out-of-network coverage and your choice of doctors you have much more freedom to be in control of your health care.
PPO’s offer out-of-network coverage
Unlike an HMO or an EPO, a PPO will let you receive care from any provider of your choice. Whether that facility is in or out-of-network. This means you can literally see any doctor or specialists, at any hospital or facility, and still receive coverage.
Remember with an HMO, your surgeon may be in-network. But that doesn’t mean his assistant, or the anesthesiologist is. Which could leave you with a large unexpected bill. With a PPO you have the peace of mind that no matter what you will get coverage.
Choice of doctors and specialists
Having the freedom to choose the surgeon who will be operating on your child is a relief to say the least. Having the peace of mind that you won’t be forced to pick a shady surgeon with bad reviews just because that’s the only doctor that accepts your insurance is worth the extra cost to most.
In most cases with a PPO health plan you will not have to choose a primary care physician or a PCP. So, if you already have a doctor that you like and want to keep, you can continue to use him as your family doctor. If you have had an OBG/YN for years and want to keep them, you can. Keep in mind if they are not in-network, you may pay slightly more for services rendered at that facility than one that is in-network.
One of the main benefits most consumers love is that a PPO health plan does not require a referral to see a specialist. So, there is no “gatekeeper” like with an HMO. With an HMO you must always go to your PCP first and get a referral. With a PPO you can go direct to the source and save some money by not paying for two doctor appointments.
How much does a PPO health plan cost?
Compared to an HMO, a PPO health plans monthly payment is usually around 10% more expensive. In some cases, even more. This cost may be worth it if you see specialists frequently or travel. As you will not have to see your PCP first and get out-of-network coverage. So, the extra cost for some members is worth the extra coverage.
While PPO’s may cost slightly more, lower premium plans usually equal higher out-of-pocket expenses for the insured. PPO’s are usually more comprehensive regarding the coverage, including certain services that other plans may charge an additional premium for.
Is a PPO health plan right for me?
There are many situations where a PPO will benefit you. If you require seeing a specialist frequently, we adamantly suggest using a PPO network, if not you will have to see your PCP all the time for referrals. Another reason a PPO may be right for you is if you have a doctor you want to keep or you travel a lot, due to it’s out-of-network coverage.