Managed health plans are one of the most popular health insurance policies available now. A PPO, or preferred provider organization, is a type of managed health insurance plan. PPOs are designed to give their members access to highly qualified health care providers and facilities within a specific network.
The PPO negotiates ahead of time with the network of providers in order to give PPO members the care they need at lower rates and affordable prices. It then passes those savings on to the members who seek services from within the network of providers.
As with many other health insurance plans, PPOs usually offer comprehensive coverage for preventative care, routine exams, inpatient care, prescription drugs, emergency care and specialist care. Monthly premiums are often more affordable than conventional indemnity health insurance programs. They may be more expensive than the average HMO's premiums, however. Copayments are often rather reasonable. PPOs have a range of individual and family deductibles in order to fit a variety of budgets.
Contrary to HMOs, or health maintenance organizations, members who seek care outside the network of care providers will still be covered. However, they may receive a lower level of coverage. They may be responsible for a higher coinsurance rate or a higher copayment.
Preferred provider organizations are common choices for group health insurance plans, such as employer-sponsored health plans, because they provide their members with the freedom to select their own health care providers, self-refer to specialists, and ensure health care coverage regardless of where their members seek care. PPOs also offer benefits to their member organizations, or network providers and facilities. For example, many PPO members seek care from within the network, which means they get more business.
Individuals and families who are considering joining a PPO should carefully consider whether their preferred health care providers and facilities are considered in-network or out-of-network. If they are in-network, out-of-pocket costs can be greatly reduced. Another important consideration is whether preferred treatments and medications are covered.
If you want to have the flexibility to select your own specialists and health care providers without having to seek pre-approvals or referrals from a primary care physician, a PPO may be the right option for you. A PPO also may be the best option if you would prefer the freedom to manage your own health care without the additional support or advice of a primary care physician.
While PPOs allow flexibility and convenience, they may not be the right choice for every individual or family. If you would prefer to avoid the extra responsibilities associated with managing your own health care, such as handling your own bills and dealing with health care providers directly, a PPO may not be for you.