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Readers Question:
What is a PPO, and how does a PPO plan work?
-Barbara
Good question, Barbara.
A PPO is an acronym for a Preferred Provider Organization. Members of a PPO are encouraged to use the insurance company’s network of doctors and hospitals, rather than supporting your choice to pick your own doctor. A cheap insurance plan will often have a very narrow number of doctors you can visit, while the best family health insurance plans tend to be quite broad. In a lot of ways, you’re paying for choice.
The preferred healthcare providers chosen by your insurance company are contracted to provide services to the health insurance company at a discount rate. Not all providers are created equal. When picking a GP or a primary care physician, you can usually pick whoever you want, and your insurance company will usually support your decision. But the more specialized (read: costly) your doctor’s education, the more your health insurance plan will tighten the grip of the PPO. Chances are, you won’t be able to pick your own neuro-surgeon and still receive the steep PPO plan discount. However, all is not. Services you insist on that are out-of-network are still covered with a PPO plan, but often with a much lower percentage of savings.
As with most family health insurance plans, you will have an annual deductible with your PPO plan that you will need to pay before the company starts to pay for your medical bills. Or you will be required to pay a percentage of your medical bills.
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.
Nicholas
