Is a Preferred Provider Organization (PPO) the Right Choice for You?

A Preferred Provider Organization (PPO) is a managed care plan that gives you permission to visit any health provider you choose (including specialists), in or out of the network, without a referral. PPOs do not require Primary Care Physicians (PCP) to direct your care and offer the highest level of flexibility in terms of where and how you can access care. Because of this, PPOs typically have the highest monthly premiums.

Do you understand managed care plans? Let’s start here to understand the benefits of PPO insurance. A managed care plan has guidelines for receiving services, including in-network, out-of-network, and referral services. If you don’t follow the guidelines, your risk is paying more out-of-pocket or not having services covered.

A PPO plan gives you the flexibility to see any provider of your choice, in or out-of-network. You don’t need a referral for specialty care with a PPO. Also, you are not required to have a designated primary care physician. This flexibility level gives you more freedom to direct your care, but it comes with the highest monthly premium.

When you’re researching your health insurance options, you’ll find two main types of managed care plans: HMO or PPO. A Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO) differ by costs, network size, freedom to see specialists, and out-of-network coverage.

Let’s compare HMOs and PPOs

PPO Plans:

• Offer more flexibility in selecting a doctor or hospital
• Often have fewer restrictions on seeing out-of-network providers
• Sometimes covers the costs of visits to out-of-network providers
• Do not require you to have a primary care physician

HMO Plans:

• Can be more affordable, with lower monthly premiums and a lower annual deductible
• Usually, require referrals from your primary care physician to see specialists for non-emergency needs
• Usually, have a list of network providers, including specialists, that you’re required to use. If you choose to visit a doctor outside of the network, there may be no coverage provided.

Choosing the right plan for you and your loved ones is never easy. Choosing between an HMO and PPO requires planning for your health care needs. If you or your family require specialists and frequently utilize the healthcare system, a PPO provides a lot of provider options without any restrictions.

If your needs are more “in case of,” and an HMO network has your doctors included, you can save money without sacrificing quality with an HMO plan. You won’t have the flexibility of a PPO network, but lower premiums and out-of-pocket costs may fit your budget.

You can expect cost-sharing A Cost Sharing Reduction (CSR) is a discount applied to your out-of-pocket costs such as deductibles, copayments and coinsurance. Your income must be within 100-250% of the Federal Poverty Level to qualify.  with a PPO plan. When you see a doctor, the PPO pays part of the cost and you pay the other part with deductibles, copayments, and coinsurance. The more you elect to pay, the lower your monthly premiums can be.

Your PPOs provider network helps keep the cost of services down. When you see an in-network provider, you’ll receive a negotiated in-network cost lower than the service’s standard price. This means you may pay a smaller copay for an in-network doctor, but an out-of-network doctor may require a larger coinsurance payment. A PPO allows you to go out-of-network, but the cost of that coverage is much more than when in-network.