There’s a strong possibility the group health insurance plan for someone you know who receives coverage through their work is a preferred provider organization (PPO) plan. A PPO plan enters into agreements with general and specialty practitioners, other medical staff members, and facilities to establish a network of participating or “preferred” providers. Health insurance companies collaborate with participating network doctors, nurses, and healthcare facilities (often referred to as in-network providers) to offer plan members healthcare at a pre-agreed discounted rate. Enrollees are provided access to “preferred provider lists” of in-network providers.
Employees are responsible for copays or deductibles while receiving care from an in-network provider. The insurance carrier pays the provider the full discounted cost that was previously agreed upon. A PPO network allows for out-of-network treatment, but for medical claims to be reimbursed at the maximum level, employees insured by the plan must get care inside the network.
A PPO’s benefits
The good news is that having a PPO plan has several benefits that make receiving treatment simple and easy.
1. You have a Choice Freedom
You have more control over where and with whom you receive care because PPO plans’ a bigger network of doctors and hospitals. All healthcare providers in your insurance company’s network charge the same in-network rate. Furthermore, you are not required to stick with a single primary care provider. This is particularly practical if you travel frequently and can’t visit the same doctor every time you have an appointment.
2. No referrals are required
You can see a specialist without a referral if you are not tied to a single primary care physician. Other plans, such as the health maintenance organization (HMO) plan, might require a consultation with your primary care physician before referring you to a specialist. You can save time and money by forgoing the process of asking your primary care physician for a referral, and you will receive the specialist treatment you require much more quickly.
3. Off-network accessibility
Although it is advised that you seek treatment from a physician or facility in your network, you may still be partially compensated for services obtained outside of it. Put, your out-of-pocket expenses will be higher than they would be if you had sought treatment from one of the chosen providers. Other health plans, like the HMO plan, expressly forbid you from seeking care from physicians outside the plan’s network, so you wouldn’t be able to have any of your care covered if you went outside the plan’s network. The sole exception is when urgent medical attention is required.
Disadvantages of a preferred provider organization (PPO) plan
Now for the less-than-favorable news. It would be best to consider a few drawbacks that can make receiving care a little more expensive before signing up for a PPO plan.
1. Increasing monthly premium fees
PPO plans often cost more than other types of coverage. You’ll not only pay a higher plan premium, but you’ll also have to pay your yearly deductible before your insurance provider begins to pay its portion. According to KFF data, the average single and family coverage for insured workers enrolled in PPO plans is higher than the national average. In 2021, the average annual plan premium for a single PPO plan will cost $7,731, and a family plan will cost $22,2211. In contrast, the average costs for an HMO plan are lower at $7,016 for a single plan and $20,809 for a family plan. Additionally, if you visit an out-of-network provider not covered by your plan’s network, you will incur higher out-of-pocket expenses.
2. Deductible expenses
You’ll have an annual deductible with a PPO plan, which is the sum of money you’ll need to pay out of pocket before your insurance starts paying anything. According to Insure2, deductibles for high-deductible health plans can be anywhere between $1,700 and $3,400. Take your PPO plan, which has a $2,000 network deductible. You would be required to pay $850 out of pocket if you broke your arm in January and your medical expenses were $800. This is because you haven’t yet paid the $2,000 health insurance premium for that year.
3. Declaring claims
When you visit a doctor, hospital, or specialist in the network, your healthcare provider submits your claim paperwork and gives your insurance company any data it requires to process the claim on your behalf. You must submit the claim paperwork independently if you obtain out-of-network care. If you’re unfamiliar with the procedure, it may be challenging or perplexing, especially if you visit your doctor many times at once, as could be the case while managing a chronic medical condition.
Are PPO plans suitable for you?
You should carefully analyze the benefits and drawbacks of a PPO plan before deciding to use one. For instance, the adaptability of a PPO can be the ideal choice if you or your dependents need regular hospital treatment or medical services from a network expert. An HMO plan will normally have a lower monthly premium and fewer out-of-pocket expenses if affordability is your primary issue. But to be sure you’re protected, look into the network of providers that plan offers in your neighborhood. If you have the money and need more options from your health insurance plan, a PPO plan could be the best option for you. Just make sure you consider all of your possibilities before making a choice.
In conclusion, the cost and quality of your medical care can be dramatically impacted by selecting the correct health insurance. Because of this, the first step for you and your family should be to thoroughly grasp your health insurance alternatives, including the benefits and drawbacks of each. PPOs may be more expensive than other types of health insurance, but they may also offer better network advantages. A PPO plan is a fantastic alternative to acquiring the treatment you want if you are allowed to select the kind of traditional group health plan you have been covered under and you desire a plan that allows you more freedom.