If one is looking for health insurance, they may have come across the term “PPO.” But what does it mean? A Preferred Provider Organization (PPO) is a type of health insurance plan that gives you more flexibility than other types of plans. With a PPO, one can choose to see any doctor or hospital in the plan’s network, or they can see doctors and hospitals outside of the network but will likely pay more out-of-pocket costs. Please look at how PPOS work and how they compare to other types of health insurance plans.
With a PPO plan, one will have a network of doctors and hospitals to choose from. They can see any doctor or hospital in the network without a referral from their primary care doctor. If one needs to see a specialist, their primary care doctor will likely refer them to one within the network.
You can also choose to see doctors and hospitals outside of the network, but you’ll likely have to pay more out-of-pocket costs. When one visits an in-network provider, the insurance company and provider agree on set prices for services. But when one sees an out-of-network provider, there is no price agreement in place. This means that one may have to pay the full cost of the service upfront and then submit a claim to their insurance company for reimbursement. The amount reimbursed will depend on an individual’s specific plan.
There are some other key things to know about PPOs. They typically have higher premiums than other health insurance plans. But they also tend to have lower deductibles and out-of-pocket costs. So while one will pay more each month for a PPO plan, they may save money if they need significant medical care.
Also, PPO plans usually require one to pay copayments or coinsurance for services. A copayment is a set dollar amount that one pays for a service, like $20 for a doctor’s visit. Coinsurance is a percentage of the cost of a service that one pay, like 20% of a $100 bill.
Moreover, PPO plans often have an annual deductible that one will need to meet before their plan starts paying for covered services. For example, if one deductible is $1,000, they will need to pay the first $1,000 of covered medical costs themself before their insurance company starts pitching in.