What Does PPO Mean in PPO Health Insurance Plans

PPO stands for Preferred Provider Organization. This is one type of health insurance plan. PPO health insurance plan offers a network of specialist or health care providers. These specialists have contracted with insurance companies in order to provide health care service to the PPO members.

These physicians are listed with PPO health plans. Members those purchase health insurance plan with PPO, can visit any of the doctor those are listed as in-network providers. Members can visit these in-network doctors to receive maximum benefits. There are several advantages and disadvantages with PPO health insurance plans.

General Information

PPO health insurance plan provide list of in-network specialist service providers. A member can choose the doctor out-of-network provider but in this case the insurance coverage reduces. For example, PPO cover 90 percent of cost of visit to an in-network service provider doctor but in case of out-network provider visit cost bared by PPO is 70 percent and the member is needed to pay extra 20 percent from his pocket. It is recommended to choose from in-network providers.

PPO Applications

PPO has 53.2 million members. PPO has provided second most common type of managed health care plans in the year 2010. The data is provided by Kaiser Family Foundation. HMO that is Health Maintenance Organizations are most common with about 66.21 million members.

Insurance cost

Compared to HMOs, PPOs are proved more expensive. In addition to monthly premium amounts, members are required to pay co-pays and co-insurance along with deductible. Co-pay is a set fee which is charged to the member each time he visit any in-network doctor or receives any medical service. Coinsurance is the percentage of service cost a member must pay. A deductible is the amount which is spends out-of-pocket of the member annually before the PPO insurance plan begins. Cost of co-insurance and co-pays are usually higher in case of out-of-network providers.

Advantages of PPO

Flexibility is the key advantage available with PPO health plans. Hundreds of specialist network is provided to the members to choose from. Out-of-network facility is also available with slightly higher expenses. PPO member does not require referral from primary physician and can directly visit to specialist without the referral.

Disadvantages OF PPO

Out-of-pocket expenses are higher with PPO health plans. Deductible, co-insurance, co-pay are charged to the PPO member. As compared to HMO plans these expenses goes higher side. In case if the member consult out-of-network provider the cost of treatment increases compared to in-network provider cost.