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What is a Preferred Provider Organization (PPO) Plan?
Just the essentials...
PPOs are designed to allow for more choice in your medical care plan with private insurance companies
Medicare recipients are also eligible to use PPOs so that they can have access to more choice in their medical services
PPOs are more expensive than HMOs but are ideal for people who need specialists and want to maintain choice in their doctors and benefits
When looking for health insurance, some people may wonder what a PPO plan is. Health insurance can be confusing these days, thanks to so many changes in the American healthcare system, so let’s take a look at one of the most common terms you’ll encounter when shopping for health insurance.
There have been many efforts by politicians and President Obama to integrate a plan for medical services that would work with all people. The problem is that it’s not true.
No one system or method works for everyone. There is never a cookie-cutter solution for your health care needs.
Every situation and health condition is unique, and the needs of individuals are just too unique to group it all into one plan.
The Beauty of Choice
That’s why it’s great that there are a variety of private insurance companies who have opted to partner with plans such as a PPO plan. A PPO plan allows the patient to choose which doctors, specialists, and drug plans that they need to suit their individual medical conditions.
With a PPO, you no longer have to stay within a network, and you are free to choose any health care professional that you feel comfortable with.
You may wonder what type of plan you should select, such as government-based (Obamacare) or a private insurance carrier.
In this article, we will show you the advantages to some of the different types of plans and discuss PPOs specifically so that you can make a more informed decision.
What is a PPO?
A PPO stands for “preferred provider organizational” plan, and it allows for more flexibility in your health care choices by offering a network of healthcare providers to choose from.
With a PPO, you have the option to receive care from a wide array of in or out-of-network doctors, specialists, and hospitals, and you are not limited to just doctors that operate within your insurance company’s network.
Unlike government-only based plans, PPOs gives you far more choice and keeps much of the control with you, the patient. This type of plan can be especially useful for those who have unique conditions that require a specilist and frequent visits to multiple doctors.
Advantages of a PPO Service Provider
The advantages of a PPO service provider have to do with your choice options and the fact that you can choose your doctor rather than have to settle for one given to you by the health industry.
People like to know that they can keep the doctor they are most comfortable with, and this is totally understandable. With a PPO, you maintain your right to choose.
Disadvantages of a PPO
The disadvantages of a PPO system is that you will pay more out-of-pocket expense if you go out-of-network for your healthcare.
The PPO systems were devised to put back into the system by keeping most services within the network. This includes a wide variety of doctors and nurses, hospitals and specialists all over the country who are a part of the network.
These are highly-professional medical experts who have agreed to be a part of the network plan to save you money on your health care expenses.
If you go outside their network, you will still receive treatment but it is not as beneficial to the doctors and participating specialists. Therefore, they end up charging you more to get treatment to keep their costs low for the network.
How to Know if a PPO Plan is Right for You
When trying to decide is a PPO Plan is a good option for you and your family, you may want to consider the following factors:
– Flexibility
If you are someone who wants greater flexibility in your health care options, you would probably like PPO systems. The idea of PPS is to give people a greater flexibility in their health plan by allowing them to choose between In-network and out-of-network providers.
This allows you to either go with their recommendations and keep your lower premium or go outside of network and receive care from your doctor.
– Higher Premiums
If you don’t mind paying higher premiums to keep your doctor that you are used to, then a PPO plan might be right for you. You will still get to take advantage of many of the benefits of a PPO plan, but you will have the added flexibility of using your doctors.
One idea is to keep your primary care physician, even if they are out of network but asks your doctor to refer you to a specialist (if needed) that is within the network.
This will keep your costs low if you need health care attention for a more serious disorder while allowing you to keep your primary care physician.
– Quality of Choice
With so many doctors and healthcare professionals to choose from, a PPO provides you with the quality of choice in your health care.
Thousands of professional medical people are involved in PPO networks so check with a local health care provider to see if your doctor is listed. If not, you are sure to find a wide variety of other professionals who can help you.
One clarification that we want to make is that, with a PPO, unlike an HMO, you are not required to have a primary care physician. You may if you want to, as a point of reference for most medical issues. But you are not required to choose a PCP on your PPO plans.
About Medical Referrals
Unlike HMOs, you also do not have to have referrals from a PCP within a PPO plan. The main difference between an HMO and a PPO is that the PPO allows you to keep your favorite doctor as your home base while choosing from the thousands of specialists and other medical professionals within the PPO network for any referrals. But referrals from your PCP are not required.
How to Save the Most Money with a PPO
If you want to get the most out of your PPO plan, you will want to plan to use the doctors and specialists within the network to save the most money and keep your premiums lower. You always have the option of keeping your home doctor that you feel comfortable with.
You may also keep any specialists such as dentists or neurologists, and others that you have dealt with in the past. If you keep your family practice doctor the same while using specialists and others within the network, you will save more money and keep your premiums lower.
About Deductibles
Like many health care programs, the PPO plan is set up with a deductible. This means that you must meet the deductible before you are allowed to reap the benefits of the insurance plan
If you have a $5000 deductible, you would have to pay the first $5000 and then the Preferred Provider Organization Plan (PPO) would kick in after that. This is known as “co-pays.”
Some Services May Not be Covered
Keep in mind that, when you choose a PPO, there may be a few services that are not covered. That’s why it’s important to check on this while shopping for your PPO or other health care plan.
You may want to compare it to HMOs to see if you might benefit from other types of coverage.
But PPOs cover more issues since it is more flexible and you can choose the doctors that you want to use. Check with your PPO provider that you are considering to see if certain services are likely to be covered with this type of plan.
It helps to compare your PPO to an HMO plan to see what the differences are as you shop for health care insurance.
The Need for Specialists
One word of advice regarding PPOs is that PPOs are designed to help people who have a need for specialists for certain ongoing conditions.
For example, if you have a heart problem that has been diagnosed by a doctor, you may see your primary physician for this disorder on a regular basis. But you may also have a need to see a cardiologist, who is more of a specialist.
The specialist may order special tests such as treadmills tests, blood tests, angiograms, Holter monitors, or other procedures to test for irregular heartbeats, special extenuating conditions, and so forth.
If you need a specialist, a PPO is going to give you a much broader scope of specialized care than an HMO. But, if you are rarely sick and only see a local primary physician on occasion, an HMO may be more right for you.
How to Choose the Best Healthcare Plan
When choosing a healthcare plan, there are some key factors to keep in mind that will help you make the best choice.
Check which type of plan best suits your needs– When shopping for a health care insurance plan or considering switching your plan, you should consider which type of plan best suits your needs. If you rarely go to the doctor, you may find that an HMO plan is enough.
If you are in need of specialists and greater flexibility in your service plan or more choice in doctors, you will be happier with a POS or PPO.
Compare the PPO plan with what you currently have in place– A PPO plan may offer you more choice if you are currently on an HMO plan and it allows you to choose your doctors more often than an HMO does. You are also not required to have a referral from a primary care physician on a PPO plan.
Consider whether you have a need for specialists in your health care plan –A PPO qualifies you to reap the benefits of many in-network specialists that can help with specific ongoing healthcare conditions, without any need for referrals. This allows you to make the decision yourself to go to the specialist, rather than waiting for approval from a primary physician to refer you.
Consider the costs – HMOs have always been the least expensive, and this continues to be the case. If you are extremely healthy with few health issues, you may find that an HMO serves you well. But you are very limited if you find yourself in need of a specialist with such plans. A PPO lets you choose to go directly to a specialist without a referral and to choose the doctors you want.
Think about your current doctors – PPOs tend to work well for people who need specialized care on occasion for some ongoing health condition or just want greater flexibility in their healthcare program. Consider how much you would like to be able to keep your current doctor when considering a PPO and remember that PPOs let you keep your doctor and even choose the specialists you want as well, for a higher premium.
Consumer Reports issued an article about PPOs in 2010 that helps to outline some of the advantages of choosing a PPO for your service provider.
Some of the key factors they discuss in the article is:
Choice of doctors– When considering PPO provider systems, always think about how much you want to keep your current doctors and whether you want to be able to choose specialists from outside the network or not. If it is not important to you which doctors you get, an HMO is fine. But for many with ongoing or recurring health conditions, being able to choose a specialist that you are happy with becomes more important.
Cost issues– Costs vary with every individual carrier and program whether it is an HMO or PPO or other type of plan. Deductibles are sometimes required with PPO before the PPO will pay for your medical costs. Premiums may also be much higher if you choose to go out of network for your health care.
High-deductibles– For healthy individuals who prefer PPOs but do not have a need for a lot of medical help, you may want to consider a high-deductible PPO plan. One of the advantages of a PPO is that you can choose from a higher-deductible plan than HMOs allow.
The trade-off – Most health experts agree that when you choose a PPO, you are trading off the much lower costs of an HMO for the level of choice and flexibility with PPOs. Making your decision on what specialists to see and when is an important part of your general health care. If that is worth paying slightly higher premiums, you may want to consider changing to a PPO.
The Balance Between Costs and Choice
HMOs are less expensive and save you more money. Are much lower in cost, but you lose choice. You are required to stay within the network to get your healthcare, so you are basically at the mercy of the doctors and specialists that your provider requires within the network.
The cost of HMOs is lower because of these factors and, as the acronym suggest, HMOs are a “health management organization,” which literally means that the organization will choose who you see for you.
A PPO, by contrast, gives you more choice in your health care service. You don’t have to have a PCP (primary care physician), as mentioned before, you can choose whether you want to see a specialist at any time either outside or inside the PPO’s network.
You can select a high-deductible provider or one that has a certain level of deductible that best meets your ability to pay any out-of-pocket expenses.
You also get to choose all of your doctors and hospitals and are never at the mercy of the system. So the choice is what you get back in return for paying more for PPOs.
How to Find a PPO
To locate a PPO provider in your area that you can benefit from, feel free to browse our site. We are connected to a wide variety of choices for health care, including many PPO providers.
Shop and compare companies and policies and ask questions when you have them so that you will know exactly what you are getting.
It is the important questions that you ask at the front end while you are shopping for health insurance that can pay off big in the long run.
How Medicare Works with PPOs
A Medicare PPO plan is a plan that takes into account your Medicare qualification (65 or older) while also allowing you to take advantage of the choices embodied in the PPO business model. PPOs are for private insurance, not government-based insurance.
Keep in mind that when you have a PPO, you will not be using any government program or have any federal healthcare coverage.
A Medicare PPO Plan falls under the category of a Medicare Advantage Plan (Part C) that is offered by a private insurance company.
As explained before, just like a non-Medicare patient, your services would all fall within the rules and regulations of a standard PPO plan, but you would still get all of the basic advantages of your Medicare plan.
In most cases, you would pay less as long as you use doctors that are within the PPO plan network.
The great part about PPOs for Medicare recipients, therefore, is that they can have the best of both worlds by using PPO systems to obtain private insurance at the basic cost of Medicare. The government allows this as an option if you qualify for Medicare benefits.
How to Know if You Qualify for Medicare Benefits
There are specific requirements to qualify for Medicare benefits in the U.S. One basic requirement is that you must have reached the age of 65.
You must also be a legal citizen of the United States and have worked in a government-based organization such as teaching, civil service, military, or other state employment system that pays into Medicare for at least ten years.
Medicare PPOs: Summary
Remember that PPOs fall under the category of Medicare (Part C) which allows for a supplemental plan to help with coverage.
Some use this as “gap insurance” as they wait to qualify for Medicare even before they turn 65. If you do this, though, you would not be considered under the Medicare Part C plan until the time that you turn 65.
Who can get a PPO?
PPOs are available to anyone of any age who wants more flexibility and freedom in choosing your health care providers, pharmacies, and specialists.
This allows you to have more control over the type and quality of health care that you receive without having this dictated by someone else within the government or from a managed health system like HMOs.
For anyone looking for a higher degree of choice that will also work as gap insurance, supplemental insurance, and Medicare Part C insurance once you are 65 years of age or older, a PPO may be right for you.
