Please explain a PPO
Health insurance called a PPO or Preferred Provider Organization is managed care insurance. The plans are based on a network of medical professionals and facilities. And they have structured benefits.
These plans let you choose the medical professionals of your choice. They have a contracted network of professionals that offer negotiated rates for added savings. But even if you go out of the network you still get a reduced benefit to help with the expense.
With these plans as you incur medical expense they will go towards what they call a deductible. A deductible is a dollar amount such as $2000 that you will have to meet before the insurer will share cost with you.
All of your incurred medical expense will go towards the deductible. If you met this in a year the insurer will then share the expenses with you. They pay 100%. More often the have a co insurance amount to met. They may split expenses 80/20 at this time. You would pay 20% and they would pay the 80% that remains.
So when you here the phrase “out of pocket maximum”, what they are talking about is your deductible + co insurance. So if you have a deductible of $3000 + a Co insurance amount of $2000. You would be expected to pay $5000 out of your pocket before the insurance company would pay 100%.
Another way a PPO helps offset some of your out of pocket expense is by offering a co-payment. A co-payment is specific dollar amount you will pay for specified medical treatments. The most common co-payments are seen with an office visit or prescription medication.
Consumers love that with a PPO they can see and medical professional they choose. Even a specialist, without the need of a referral. They can go to a medical professional or facility that is not in network and still get some benefit.
Choosing to go with a PPO has its advantages and disadvantages. Get to know all the facts. Compare what your medical needs and budget might be to the options that are available in a PPO plan.
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Written by Jeff Cline on December 9th, 2009 with
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