If you are choosing a new health plan, it is very important for you to understand how plans work. One of the most popular types of health plans is a Preferred Provider Organization (PPO).
This type of plan is propular because it helps reduce out of pocket medical costs, is usually very simple to use, and allows the plan member to have some flexibility in choosing their medical service providers.
A PPO contains a network of medical service providers like doctors, hospitals, and even pharmacies. These providers join the network and agree to the network guidelines, including cost controls. In reaturn, the medical providers get a steady strem of patients by being listed in the network's publications or websites.
An insured person will have the greatest coverage by using the network medical providers. Since the insurance company which runs the network can control costs, they are willing to cover services at a much higher level. So, for instance, an in-network doctor's visit may only require a $20 co-pay, while a visit to a doctor who does not participate in the network may cost $50. This is just an example, and all insured people need to look at their own policies for specific details.
But a PPO health plan does allow the insured people some flexibility in selecting their own health care providers. If they choose to visit a medical service provider who does not participate in the network, they will still be covered. They just understand they will pay more out of their own pockets to leave the network.
That way, the health insurer encourages their members to use the PPO providers, but allows them to step outside. So a PPO plan is pretty flexible. Compare this to an HMO (Health Maintenance Organization) which will not cover any medical services outside the network.
Of course, this is a good time to mention some exceptions to network coverage guidelines. Every network plan that I have seen, PPO or HMO, does cover services outside the network in the case of an emergency. Some other exceptions may be made for very specialized medical services that the network does not contain. In any case, an insured person has a responsibility to understand the network rules, and the exceptions before they seek medical services. In a non-emergency situation, a plan member should always get the service pre-approved before their appointment date.
PPO plans are very popular because they do allow some flexibility, but also contain costs for both the insurance company and the plan members. They also help medical providers because they help them attract new patients because their names are included in the list of network providers, which will bring in new patients.
Of course, your own choice of health plans will depend upon the plans available in your local area, your budget, and your health care needs. It is important to find out which insurers provide policies in your area, how much they cost, and how they cover medical services before you make a choice.
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