Are you considering new health insurance? You may be wondering just what is a PPO and should you join one if offered this health insurance option. PPO stands for Preferred Provider Organization. This type of health insurance provides members with a defined choice of hospitals and physicians who accept the negotiated prices of the health insurance network. You may also have the option to see a provider who is not in the network, but you will be responsible for paying the difference between the negotiated price and the provider’s price. The primary benefit of a PPO plan is lower costs. These lower costs translate into savings for the members.
PPOs are usually offered to a group as a health insurance plan. The defined network of providers and hospitals allows the insurance company to offer health insurance to a larger group without increasing premiums. There will normally be a co-pay for the member, but as long as they stay in network, the rest of the cost is picked up by the health insurance plan.
The PPO network will develop and oversee all managed care for the members. They will negotiate the fee schedule with all network health care professionals and facilities. The PPO is similar to an HMO, but generally provides its members more flexibility in choosing providers. With an HMO, there is no option to seek treatment from an out-of-network provider and have any of the costs covered by health insurance. With the PPO, a member may choose to use an out-of-network provider. The PPO will pay a set amount for the treatment or services and if there is any excess charge, the member is responsible for payment. The PPO will generally require that the member pays a certain amount of out-of-pocket fees before services are covered by insurance.
Most people are happy with their PPO plans, especially if the company has an arrangement with a wide network. If there are plenty of options which are geographically convenient or which include the member’s current physicians, the member should be happy with the PPO. If not, they can always choose to see an out-of-network physician but will be responsible for any costs not covered by insurance.
Advantages of joining a PPO include significant savings in healthcare costs within network. There is also a tax advantage to using a PPO since the premiums are considered tax deductible. Depending on the size of the PPO network, most members will find it includes their current provider.
Disadvantages of joining a PPO include higher costs to the member if they seek treatment from an out-of-network provider. There are also some PPOs which are not efficient and are challenging as a member tries to seek care. There are often several steps in the insurance payment process which can result in delays in payment or reimbursement to the members. These slow pay delays can negatively affect which doctors will be willing to join the PPO network.
Knowing just what is a PPO and the benefits of doing so can help you to know which choice to make. Before joining a PPO, check into the network to determine the types of healthcare providers and facilities which are covered. Compare costs and see which insurance program is right for you.