What is PPO? Company Health Services Defined
When it comes to health insurance, there is no shortage of acronyms and unconventional terms needed to understand how health insurance works. Do you have a PPO or are you considering signing up? Find out what it is, if it’s the right option for you, and how to tell if you already have it.
What is PPO?
PPO is a type of health insurance plan. Means the preferred provider organization. With PPOs, you pay less when you see a provider in your insurance company’s network – this is the preferred part. Your PPO has already negotiated a certain rate for the healthcare provided by these in-network providers.
You can also see many providers for medical care outside of the PPO network. However, you usually pay more for out-of-network providers and medical services. This is because there is no formal rate agreement negotiated between the following. non-network provider and your plan.
Why would someone choose a PPO over an HMO?
PPOs are one of the most popular health insurance plans because of their flexibility. With a PPO, you can visit any healthcare provider you want, including specialists, without having to get a referral from a primary care physician (PCP) first. This can be useful if you’re not near a doctor in your provider network, for example, when you’re traveling or if you have a team of healthcare professionals you’re comfortable with, even if they’re out of the network.
The benefits of a PPO include the opportunity to choose the physician and specialist you want without having to go to a primary doctor initially. Yuna Rapoport, MD, MPH, is an ophthalmologist at Manhattan Eye in New York. This puts the patient in the driver’s seat.
PPO vs HMO
Of course, PPOs aren’t your only option. Another common type of health insurance plan is an HMO or health care organization. HMO plans have a few key differences over PPOs that may affect your choice of the health insurance company.
With an HMO, you’ll usually need to go through your PCP for a referral to speak to an in-network expert. Your HMO also doesn’t cover out-of-network provider visits unless it’s really a medical emergency, and even then, you may be part of the bill.
However, Dr. For patients, HMO plans can be valuable, Rapoport says. He says the benefit of HMOs is from a systems-based perspective. By maintaining a close relationship with a primary physician, there are fewer unnecessary visits to specialists, fewer imaging, and fewer diagnostic tests. The results are comparable to or better than a PPO and all doctors of the patients are recommended by the system.
While getting a referral before seeing a specialist can be painful, it also means that your PCP is involved in your health in a way that doctors at a PPO sometimes aren’t, helping you coordinate care accordingly.