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Preferred Provider Organizations (PPO)

Candlefocus Editor
A preferred provider organization, or PPO, is a type of managed-care health insurance plan. Preferred providers, also known as PPO medical and healthcare providers, are providers who have contracts with health insurance companies to provide services at pre-negotiated rates. Patients who are taking part in a PPO agreement can usually choose to use any of the contracted providers, although using out-of-network providers may cost more in the form of higher copays or deductibles.

The cost of a PPO plan is more expensive than a conventional health plan, as both premiums and associated copays are generally greater than those associated with other health plan types. However, given the greater choice of providers and services and the flexibility of the plan, many people are willing to pay the additional costs for the assurance of more complete coverage. Choosing between a PPO and a less expensive option such as an HMO generally involves weighing one's desire for greater accessibility to doctors and services versus the cost of the plan.

With PPOs, patients are free to visit any provider in the network and don't usually require a referral to see a specialist. Services may include preventative, diagnostic, and office visits, as well as hospitalization and surgery. With varying levels of coverage, many plans offer prescription drug coverage as well. In addition, PPO plans may sometimes allow for the acceptance of out-of-network providers; however, the cost of doing so is often prohibitively expensive, sometimes comprising of the entire cost of the treatment.

In summary, although the cost of a PPO plan is typically higher than other types of plans, the comprehensive coverage, lack of referral requirements, and the ability to choose from a wider range of providers and services make PPO plans desirable for those wanting more freedom when selecting their doctor or healthcare provider.

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