An acronym with which most of us are familiar is “PPO”; what we may not all realize is what it stands for: “Preferred Provider Organization.” This means, essentially, that part of this type of health insurance plan is a network of providers who contract to provide medical services at pre-agreed upon rates in exchange for being a listed provider within a particular plan’s directory.
What is the benefit of a PPO plan for doctors and insurers?
The insurers benefit by being able to offer a large selection of hospitals and physicians to their customers, while the medical offices benefit by being provided a steady stream of patients because nearly every insured will consult his or her PPO directory to find an in-network office or hospital in order to keep from spending the extra money it would cost them to see someone “out of network” – or not on the plan.
What is the benefit of a PPO plan for the insured?
The insured individual will be covered at a lower cost if he or she chooses to receive medical treatment from a PPO provider. For example, a PPO plan may cover 90% of the individual’s treatment expenses after they meet a particular deductible set by their insurance provider, but may only cover 60% of the cost if treatment is sought by a professional outside of the network. Therefore, the benefit to the insured is that the out-of-pocket costs to an individual who seeks medical assistance from a network provider will be less.
What are some exceptions to “out of network” treatment being more expensive?
Oftentimes emergency treatment will be covered at an in-network rate of pay, even if an individual had to seek care outside the network. If care is given in a non-emergency capacity, pre-authorization is generally required to receive the in-network pricing when seeing an out-of-network physician.
When it is necessary to seek medical assistance out-of-network due to specific conditions that can’t be treated by an in-network physician, an individual should consider taking information they receive from his or her consultation back to a family physician who would be in-network, alleviating the extra cost of multiple appointments.
PPO health insurance plans remain popular with consumers seeking insurance because many believe that preferred provider organizations control patient costs, but still offer choices of which doctor or medical professional they can see.
Medical Insurance
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February 1st, 2010 at 3:46 pm
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