What is a PPO?
PPOs At-a-Glance
Positives
Lower monthly premium than HMO’s, Better doctor selection than HMO’s.
Negatives
Higher maximum out of pocket potential than HMO plans. Labs, Tests, and X-rays and
routine wellness checkups are generally not covered under PPO plans or are subject
to a high deductible and/or co-insurance.
PPO stands for Preferred Provider Organization. PPO plans were developed after HMO’s
to address the negatives associated with those plans. With a PPO plan you are retaining
more risk, and buying less insurance than you are with an HMO.
Popular Individual PPO Plans
Aetna PPO 2500, Aetna PPO 5000, Health Net Simple Value 30 Gen Rx, Nationwide Lifestyle
1750.
As a member of a PPO, or "Preferred Provider Organization," plan, you'll be encouraged
to use the insurance company's network of participating doctors and hospitals. These
providers have been contracted to provide services to the plan's members at a discounted
rate. You won't be required to pick a primary care physician and you will be able
to see doctors and specialists within the network at your own discretion. You will
probably have an annual deductible to pay before the insurance company begins paying
your claims. Once the deductible is met, you'll be required to make a co-payment
for most doctors' office visits. Some plans may also require that you cover a percentage
of the total charges.
With a PPO plan, services rendered by an out-of-network physician are typically
covered at a lower percentage than services rendered by a network physician. Seeing
an out-of-network provider can become costly. For example, if you visit an out-of-network
provider for services totaling $500, the PPO plan may cover the charge at only 60%
of the amount that a network provider would charge for the same service. If a network
doctor would accept $250 as payment in full, this means that the insurance company
would pay only $150 and the remaining $350 would come out of your pocket. Additionally,
if you see a provider outside of the plan's network, you may have to pay the charges
up front and then submit your own claim for reimbursement.
PPO plans offer flexibility in choosing your providers, however, make sure that
you familiarize yourself with the plan's provider network before choosing a PPO
plan. You may wish to make sure that your favorite doctor or local hospital belongs
to the network. If you have children who need to make regular visits to the doctor,
be sure that you're aware of the plan's benefits for preventive and well-child care.
Back to Individual and Family plans