What is a PPO plan?
PPO is one of those three-letter healthcare buzzwords that makes you cringe. You know it's an option for health insurance coverage, but what does PPO stand for? How is it different from those other plans? More importantly, is it better?
The truth is, there are no "better" plans. There are just better plans for you. Deciding if a PPO is your best option depends on what you want covered, and what you want to pay, for a healthcare plan.
To get your other questions answered, read on for an overview of PPO health insurance. Knowing the pros and cons of PPO coverage can help you decide if it's a plan that suits your needs.
What Does PPO Mean?
PPO is short for Preferred Provider Organization. It includes an insurance carrier's network of “preferred” healthcare providers, like doctors, specialists and hospitals, that have agreed to charge a negotiated rate for covered medical services.
What Does A PPO Plan Cover?
PPO healthcare plans must cover the Essential Health Benefits that are required by the Affordable Care Act. Your extent of benefits coverage depends on the insurance provider you buy from, and the specific PPO plan you choose from that insurer. If you have specific health needs, like prescription medications or specialized care for certain health conditions, make sure you find a PPO that covers those items and services.
Does A PPO Give Me Options?
A PPO offers a lot of flexibility with your healthcare options, based on two major factors:
- Its large network of doctors
- Its flexibility in how you seek care
Network Of Doctors:
PPO networks include a much larger pool of healthcare providers than HMO networks. That means you have more options for choosing your doctors, specialists, clinics, hospitals, and other healthcare facilities. With certain PPO plans, you can also get coverage for emergency care from hospitals outside your plan's network.
Here are three situations where a large network of providers can be helpful:
- If you live in an area with a limited number of doctors and healthcare facilities, a PPO is more likely to include nearby facilities and doctors in its network.
- If you're switching plans and want to keep your current doctor, a PPO is more likely to include that doctor in its network.
- If you get hurt away from home, you can go to the nearest emergency room without having to pay the higher rate for out-of-network care.
Flexibility In Seeking Care:
With PPOs, you don't need to choose a primary care physician (PCP). You choose which doctors you want to see, and how often you want to see them.
Here are three examples of why flexibility in seeking medical care can be helpful:
- If you need to see a specialist, you can make an appointment without having to get a referral from your primary doctor.
- If you visit a doctor you don't like, you can make your next appointment with a different in-network doctor — no questions asked, and no waiting for approval from your insurance provider to switch doctors.
- If you don't want to see a doctor for routine check-ups, you don't have to. You have the freedom to seek care whenever you want, and from any doctor in your plan's network.
How Much Does A PPO Cost?
There is a price for so much freedom with your healthcare plan. To pay for a PPO's larger network size and greater flexibility in how and when you seek care, a PPO will typically have higher premiums, copays and deductibles than an HMO.
The same rule of thumb for plan coverage applies to plan costs: The specific amount you pay for health insurance expenses depends on the insurance provider you choose, and the specific PPO plan you go with. For example, a single insurance provider might offer more than one PPO plan. Each plan can differ in factors like network size, coverage for prescription drugs and medical services, and coverage costs (like premiums, copays, and deductibles). So a cheaper PPO plan from that insurer could have a smaller provider network or less generous coverage.
The simplest way to lower your healthcare costs in a PPO health plan is to seek care from doctors in your plan's network. While a PPO will cover services and care you receive from healthcare providers outside its network, it might cover a smaller percentage of the total cost of care. (Generally, a PPO covers 70% of out-of-network visits.) Or the overall cost for that service might be more than the cost of the same service in-network. In short, you risk paying more for any out-of-network services you receive.
Is A PPO Worth Its Higher Cost?
A PPO's "worth" depends on what you want from healthcare coverage.
Here are some scenarios to consider when deciding if a PPO is right for you:
- You're switching plans but don't want to switch healthcare providers. You've had your doctor for awhile, and you want to stick with someone who knows your health history. You find out that between the HMO and a PPO plans you're looking at, your doctor is in the PPO network, but not in the HMO network.
- You like to be in charge of your own care. You don't want see a PCP before you see a specialist, and you want to choose from a large network of doctors.
- You need access to the closest healthcare facilities. You live in a remote area with a limited number of healthcare providers, or you travel and want access to the closest emergency room without worrying if you'll be charged out-of-network prices.
- You want to see a specialist without having to wait or pay extra. With a PPO, you can call a specialist today. With an HMO, you have to schedule an appointment with your PCP, pay a copay to see your PCP, and then get a referral -- all before you can schedule an appointment with a specialist.
- You don't need or want much medical care. You don't expect to see a doctor often, but you want quick access to a doctor when you do need care. With an HMO, you have to wait until your PCP has open availability. With a PPO, you can search your plan's network for the earliest available doctor.
Of course, there are many more scenarios that would make a PPO valuable to someone looking for health insurance. Take a look at what you want and need from healthcare coverage, and ask yourself this: Is a PPO's higher cost worthwhile to address my healthcare needs?
As you compare PPO plans with other health insurance options, don't be afraid to ask questions! A website called First Quote Health can direct you to licensed agents who can answer your questions, and help find the best plan for you.