What Is PPO Health Insurance Coverage?

By Robert Fredricks Posted in Health Insurance News



What Is PPO Coverage

A Preferred Provider Option, also known as preferred provider organization and participating provider organization, is a type of managed-care organization. With a PPO, the health insurance companies have special contracts with certain providers to offer health care at reduced rates for consumers. Along with an HMO, the PPO is the most popular type of health insurance available in America.

Preferred provider organization charge an access fee to the insurance company to use their network. They negotiate with providers to handle provider disputes and set fee schedules.

Benefits Of A PPO

One of the benefits of a Preferred Provider Option is the flexibility it offers. While it is more expensive than an HMO, it offers greater mobility in choice of doctors and hospitals. If you are getting your health insurance through your employer, then you may have the option of an HMO or a PPO.

Unlike an HMO, PPOs do not require the policy holder to choose a primary care physician. As longs as you choose a physician that is on their provider list, then you can see them at will. However, the PPO is more expensive and typically costs more out of pocket than an HMO. With a PPO, there is usually a co-pay for visits and a deductible that needs to be met before the insurance company will begin to cover expenses. This deductible can be anywhere from $500-$2,000 per person or up to $5,000 per family.

Even with the increased cost a PPO can still be a better option for some. Physicians may be more willing to prescribe certain medications or tests if you use a PPO instead of an HMO. Because HMOs can be so financially restrictive, some physicians may be leery of okaying tests and procedures that the insurance company won’t pay for.

What This Means For Health Care Reform

With health care reform at the fore front of everyone’s’ minds, you may be wondering what the pros or cons are of a public option. Actually a public insurance option would include a PPO also. If the government takes over health care completely, health care costs will decrease but the flexibility may vanish.

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