Such a plan creates a win-win situation for both the hospitals and the patient. The insurance provider sends more customers to the in-network hospitals, and the customers receive more affordable treatment. Most PPO plans have a deductible, which is a yearly fixed payment you make for health care services covered until your plan starts offering cost-sharing benefits. For example, if you choose a PPO plan with a $1,000 deductible, you pay for medical expenses until the bill reaches $1,000. After this, you begin sharing the costs with your insurer. This type of cost-sharing is known as coinsurance. Once you’ve reached your deductible amount, your insurer starts paying a fixed percentage of your medical bills depending on your plan. Many insurers pay about 70%-80% of the costs, but this can vary depending on your agreement with the insurance provider. PPO plans also vary by the copay they offer. Copay refers to the flat fee you pay out of pocket to see a doctor, fill a prescription, or see any other health care provider. It’s the expense covered by you as a policyholder, while the remaining amount is paid by your insurance provider.
Pros and Cons of a PPO
Pros Explained
Discounted treatment: PPOs help you access a wide range of treatment options at discounted rates when you work with their in-network providers.Flexibility: You can choose between several hospitals, clinics, physicians, and other health care providers within and even beyond the network.Broader coverage: PPOs offer more than just health checkups and medical treatments. You can get access to chiropractors, acupuncture therapy, and other health care services not typically offered by other insurance plans.
Cons Explained
Expensive: PPOs tend to have larger deductibles and copays, making them more expensive than other types of insurance plans. For example, the average deductible is $1,204, so you have to pay more than $1,000 out of pocket before your insurer offers any benefits.Higher out-of-network costs: While you can choose to see any health care provider, you will have larger expenses if you pick an out-of-network provider. This can force you to work with in-network doctors if you have a tight budget.More paperwork and budgeting: As PPOs offer different pricing for in-network and out-of-network providers, you have to handle extra paperwork and budgeting to calculate your medical bill expenses.
PPO vs. HMO: Which Is Better?
PPOs and HMOs (health maintenance organization) are among the most common types of insurance plans. Here’s a breakdown of the differences between the two.
