Preferred Provider Organizations (PPOs)
What is a PPO?
A PPO is a type of health plan that gives you the choice of seeing a provider or going to a hospital in a network or outside of the network. A PPO is a managed care plan, which means a group, or network, of doctors and hospitals have
agreed to a specific rate for their services every time they are reimbursed by the health plan. Because of this, managed care plans are usually the most cost effective types of health plans.
Health Maintenance Organizations (HMOs) and PPOs are examples of managed care plans. PPO plans give you more flexibility than HMOs. In many ways, they can be the best of both worlds. You can take advantage of the cost savings associated with a network of providers, but you also have the option of choosing providers who are out of the network too (at a higher cost to you).
The Benefits of a PPO:
- Copayments: You usually pay a small copayment ($10 - $30) for visits to in-network doctors.
- Freedom: Unlike HMOs, where you must first visit your primary care physician (PCP) in order to get a referral to a specialist, PPOs allow self-referral, or full access to doctors.
- Specialists: You can see specialists without a referral.
- More Options: You can receive care outside of the network (but you’ll pay more).
Things to Consider:
- What’s Important to You?: If you want more freedom to choose your physician and specialists without a referral, then a PPO is a good option.
- Cost: If you require care outside of the PPO network, you’ll pay a “coinsurance.” This is the difference between what the doctor charges and what the PPO determines is “reasonable and customary” for that type of care. Make sure you do your homework.
- Filing Claims: If you choose to go out of network, you will probably need to file your own claims.
- Deductibles: Depending on the PPO plan you choose, there will be an annual deductible that you must meet before the health insurance kicks in.
- Your health: If you know you will need a certain type of care in the near future, research the hospitals and physicians who specialize in that area. For instance, if you want fertility treatments or want to have a baby in the coming year, you may choose a different type of plan based on the expertise and type of services a physician or hospital might offer.
HMO vs. PPO
|Choose only from providers in a network||Choose from providers (physicians and hospitals) in a network or out of network|
|Must get a referral from primary care physician to see specialists||Can self-refer, no primary care physician required|
|Less expensive||Can be more expensive, especially if you see providers out of network|
|Usually no claims to file||May need to file your own claims if you see providers out of network|
|Usually no annual deductible||Must meet annual deductible before health insurance kicks in (amount varies, depending on the plan)|
|Good for people who need basic care||Good for people who need more freedom and specialty care|