PPO - Preferred Provider Organization

PPO stands for Preferred Provider Organization. The service providers in the PPO network cater to the health care needs of a group of policy holders. The PPOs are sponsored by insurance companies or some other entities.

 

The first difference you would notice, if you compare the PPO plan with a HMO plan is, PPO plans do not require any primary care physician. You are allowed to visit any doctor in the network. Since there is no primary care physician in the PPO plan, you are also free to visit a specialist if you need to.

 

If you use the service providers that are in the PPO network, you costs are covered 100% less the copay amount. If you visit a provider outside of the PPO network, your cost may be covered for up to 65% less the copay amount. This means you are practically free to visit any doctor anytime with no restrictions however, you get a better deal if you use the ones in the PPO network.

 

Main Features of PPO Plans:

 

  1. There are individual and family deductibles defined.

  2. Out of pocket expenses are higher than the HMO plans.

  3. There might be a life time maximum in the tune of $2m or so depending on the contract.

  4. In-network doctor visits are covered 100% less a copay that varies from $20 to $40. Out-of-network doctor visits may be covered up to 65% less any copay amounts.

  5. Outpatient emergency visits to a in-network hospital are covered 85% if admitted, else a copay of about $75 is also applicable. Out of network outpatient emergency visits are covered up to 65% if admitted, else a copy of $75 is also applicable.

  6. Inpatient hospital services are covered 85%. There is no copay per admission.

 

Advantages of PPO Plans

 

PPO plan subscribers can visit any doctor of their choice regardless of the doctor being in or out-of

the PPO network. However, the cost covered for visits to the service providers in the PPO network is higher as compared to the visits to the out-of-network service providers.

 

You can also visit any specialist of your choice without needing a referral from anyone.

 

Though the costs are a bit higher than the HMO plans, the out of pocket expenses are limited to the copays plus the percentage not covered by the plan.

 

Disadvantages of PPO Plans

 

PPO plans are bit more expensive as compared to the HMO plans. The cost of seeing an out of network service provider is high.

 

In a nutshell, the PPO plan offers the choice to use both in and out of network service providers without the requirement of having a primary care physician. The plan also encourages you to use an in-network service provider by covering a higher percentage of the costs for in-network services.