What is a PPO?
PPO is an acronym for any of the following type of medical insurance namely preferred provider organization or participating provider organization plans. It is a managed care organization which is offered in the United States that is composed of hospitals, medical doctors and other health care providers that have sealed a covenant with third party medical administrators or insurers which provides health care to its members at a reduced rate.
Preferred Provider organization, a term which is typically used for PPO plans, is classified as a subscription-based medical are arrangement. This means that instead of paying in advance all the medical fees which your physician may charge in case you need their services, you are paying fees for substantial discounts with your physician’s regular rate. This means that your choice of physician will not be confined to a particular doctor just like the one offered by HMO plans. You have the liberty to choose whoever physician you prefer but if you wish to save more then it would be economical to choose the physicians that belong to their network for greater discounts on the services which they offer. Normally, all PPO members are provided with a list of physicians and specialist side by side with their set fee schedules for your information. You are then given the freedom to select which amongst these physicians you wish to go to when you unfortunately suffer ailment or diseases.
Advantages of PPO Plans
PPO plans is advantageous both for the insurer and the preferred physician. The buyer gets reduced rates of the physician of their choice thus giving him or her additional saving in his or her medical expenses. The preferred physician will also earn more because PPO members will prefer to choose their service rather than that which is outside of the PPO network because of the discounts the members will get. Additional number of patients is equivalent to greater income. So in the end, PPO plans is one of the best mutual beneficial form of financial relationship in the insurance world.
Moreover, the PPO member will not need the referral from any doctor just to get a discounted rate because any physician who is listed in the HMO network has initially agreed with this discounted rate thus no other proof is necessary except for you HMO identification card.
One of the main disadvantages of PPO plans is its cost. Compared to HMO plans it is more expensive and it is very unlikely for PPO company providers to shoulder full cost of your medical expenses, especially if you wish to have a physician who is outside their prescribed list of doctors.
PPO has both advantages and disadvantages. It is a matter of weighing these two by comparing your needs with what is being offered by PPO plan providers. Just remember that PPO plans are more expensive because it offers flexibility, greater discounts, convenience and accessibility as well as wider medical service coverage compared to HMO plans. So next time you think of purchasing a medical insurance, try to consider PPO rather than your typical health insurance plan or your cheaper HMO plans especially if you wish a worry free medical future.