Preferred Provider Organization Plans — PPO Plans, Coverage, & Quotes
What is PPO insurance? It is another type of managed care health insurance. A PPO health plan, also known as a Preferred Provider Organization plan, is a group of providers such as hospitals and physicians. Like an HMO, it requires you to pay monthly premiums and covers unlimited health care services. The main difference is that with individual health insurance, PPO plans offer greater freedom. There are co-payments involved with a PPO, which can cost around $10-$30 per prescription, visit, or test. Most PPO plans also require you to pay a deductible before the coverage takes effect, although co-payments are often considered as fulfilling part of that amount.
A PPO health insurance plan gives you more control over your health care. For one thing, you can select any doctor you choose. Similar to other forms of managed care, there is a network of physicians that works with your PPO medical plan. If you choose a primary care physician within the PPO plan’s network, most of the cost will be covered less a small co-pay. PPO plans are able to offer services at a reduced rate because sponsors pledge to increase patient volume within the network. However, you won’t be on your own if you see an out-of-network doctor. As opposed to other individual health insurance plans that force you to cover the entire cost of out-of-pocket, PPO plans will pay part of the bill. You will have to shoulder more of the cost than you would if you saw an in-network physician, but the option is still there. Remember that you may have to fill out and submit paperwork in order to get the partial claims paid for if you go out-of-network.
The other significant difference of PPO health plans is the concept of “self-referral”. If you want to see a specialist, you don’t have to wait for your primary care physician (PCP) to approve and refer you. This can save money (in the form of the co-pay for your PCP visit) as well as time. Instead, you can search for specialists within the PPO insurance plan’s network and make an appointment yourself. Again, you can also see a specialist outside of the preferred network, but it will be far more expensive. While doing so could be helpful for someone with a rare condition requiring special treatment from specialists unlikely to be covered in a PPO health plan, it is always a good idea to compare PPO plans and see if the physicians you want to see are in their networks. Some PPO insurance plans have larger networks than others. It can have a significant impact on your finances. For example, a PPO plan may cover 80% of the cost to see an in-network physician, but will only reimburse 50% of the cost to see an out-of-network one.
In fact, PPO health insurance plans do not require you to have a primary care physician at all! While having one is recommended for preventative health reasons, a PPO health plan doesn’t force you to have a gatekeeper in charge of your health care. This can be very appealing. On the other hand, PPO plan premiums are normally higher. You will also have to pay more in co-insurance and co-payments. Its deductible can depend on a variety of factors; a high-deductible PPO may result in lower premiums. Balancing the two is essential. Another surprising pitfall of PPO plans is many only cover the specified percentage of “reasonable costs” for medical treatment. If the out-of-network physician or hospital is especially expensive, you may end up responsible for the remaining bill above and beyond the co-insurance percentage.
Is a PPO health plan right for you? VitalOne’s licensed insurance agents are ready to assist you in comparing the cost and coverage of PPO plans.