Preferred Provider Organization (PPO)
A Preferred Provider Organization (PPO) plan is good for someone who likes a certain amount of freedom in choosing their healthcare providers, but also wants to keep their insurance costs fairly low. These plans are less restrictive than HMO plans, however, they usually require you to pay a slightly higher out-of-pocket amount.
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Advantages to Preferred Provider Organizations (PPOs)
- You choose your doctor or healthcare providers (hospitals, specialists, etc). The plan encourages you to choose a doctor from within its network of providers, but will cover a portion of the costs if you choose to see a doctor outside the network.
- You do not need a referral from a single chosen doctor to see a specialist (as you do with HMO).
Limitations to Preferred Provider Organizations (PPOs)
- Usually slightly more expensive than an HMO plan.
- If you choose a healthcare provider who is not in the PPO network, you will pay a higher percentage of the costs than you would for a network provider.
- Most in-network healthcare facilities require little paperwork on your part, but if you choose a non-network doctor, you may need to pay for the entire cost of the visit out of pocket, then submit a claim form for reimbursement.
Preferred Provider Organization (PPO) Product Features:
Similar to HMO, PPO plans are a “managed care” option. They have a network of doctors and other healthcare professionals that are covered under the plan. As a member of a PPO, you are encouraged to use the physicians that are part of this network.
Unlike the HMO plans, however, PPO policies will still cover a portion of your costs if you choose to go outside of the network. Seeing an in-network doctor for a routine visit, you might pay a co-payment of around $10 or $20, or you may have a deductible. If you visit a non-network doctor for the same routine visit, you might pay as much as 50 percent of the bill.
If you’re the kind of person who likes to have the freedom to choose your own specialist, without having to seek a referral from your primary care doctor, then a PPO plan may suit you best. This is an important difference from the HMO option, which requires you to have a designated doctor to serve as a “gatekeeper” for any specialty care.
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