The good and bad of PPO health insurance plans
Preferred Provider Organizations, or PPO's, are among the most popular types of group health insurance plans. There are many features of PPO plans that make them more attractive than other managed care policies, but some characteristics of PPO plans can be problematic or even downright frustrating. If you are faced with an opportunity to select your own plan, know both the advantages and disadvantages of PPO insurance before making a choice.
Flexibility
One of the advantages of a PPO insurance plan is complete flexibility. Unlike other, more restrictive managed care health insurance programs, PPO policies allow members to visit any doctor or medical facility without the need to designate a primary care physician (PCP) who must be seen before other doctors can be consulted.
No Referrals
PPO insurance plans allow members to schedule appointments and receive treatment from specialists without first obtaining a referral from a PCP. An advantage of a plan without referrals is faster treatment for complex issues, because a specialist can be consulted immediately; and a lower cost, because no money is spent on an extra visit to a PCP.
Out-of-Network Benefits
The most advantageous aspect of a PPO health insurance plan is the ability to visit non-network physicians or facilities. PPO plans will pay the bulk of treatment costs for services rendered by doctors, even if they are not contracted as participating providers with the insurance carrier. This allows covered members to obtain treatment from any healthcare professional, regardless of managed care affiliations.
Deductibles
A major disadvantage of having PPO insurance over other types of plans is the presence of a deductible. The cost for treatment provided by non-network physicians will not be paid by the insurance company until the member first contributes a lump sum amount toward the invoice. PPO deductibles can range from several hundred dollars to several thousand dollars.
Co-Insurance
Co-insurance is another disadvantage of PPO plans. After fulfilling the deductible for out-of-network treatment costs, members are still responsible for a portion of any remaining balance. Payment for services received outside the PPO network consists of a percentage split, or cost-sharing amount, between the member and the carrier. Co-insurance percentages, the amount paid by the insurance company, range from 70 to 90 percent, leaving the remaining 10 to 30 percent on the shoulders of the member.
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