• Thomas Hart

The Good & Bad of PPO Plans



In case you check with your friends regarding the type of health insurance that they currently hold, you will most likely learn that their plan was provided by their employer. The Kaiser Family Foundation (KFF) conducted research, which revealed that almost half of workers in America who are covered are insured with a health plan sponsored by the employer, and typically, it is a preferred provider organization (PPO) plan.


It is now time to look at some advantages as well as downsides of America’s most common health coverage plan—the PPO plan.


What is a preferred provider organization (PPO) plan?

A PPO plan is one kind of health insurance plan where particular doctors and hospitals fall under a contract for establishing a network that includes participating or “preferred” providers.

Any employee who is covered by a PPO plan must seek medical assistance only from these specific doctors or hospitals that are preferred providers of their insurance company to ensure that they enjoy optimal payments of claims.


Pros of a preferred provider organization (PPO) plan

Firstly, let us look at the various advantages of being covered by a PPO plan, all of which contribute to making it a convenient experience.


Freedom of choice

You enjoy substantial freedom when it comes to whom you seek care from and where since the PPO plans enlist a wide network of doctors and hospitals that you can choose from. Each doctor, as well as the healthcare facility that forms a part of your insurance company’s network, tends to offer an in-network price that is essentially the same.

Furthermore, you are not restricted by the commitment to one single primary care physician. In case you are someone who travels often, you may not be able to go to the same doctor each time, making PPO particularly convenient.


No referrals needed

One more advantage that is associated with the provision of choosing from a range of doctors is that you can see a specialist without ant referrals. On the other hand, plans such as the health maintenance organization (HMO) plan require the insured individuals to book an appointment with their primary care physician first and seek a referral from them to see a specialist.

Since PPO does not require you to do so, you will end up saving a considerable amount of time and money required to go through the extra appointment. Moreover, you can enjoy specialized care a lot sooner.


Out-of-network availability

Although it is best to stick to the facilities and doctors enlisted in the network, do note that your costs will be partially covered if you do obtain the care from someone else. But you will be required to pay extra out-of-pocket costs when compared to a scenario wherein you would have sought care from a preferred provider.

Many other health plans mandate seeking medical care only from medical providers enlisted in your network if you want your costs to be covered. Thus, seeing someone who is not a part of your network is not a good idea, as no portion of the costs associated with your care will be covered. This rule is overlooked in the case of medical emergencies.


Cons of a preferred provider organization (PPO) plan

It is also important to look at some of the downsides of this plan before you pick a PPO plan.


Higher premium costs

The KFF data has revealed that insured workers under PPO plans pay higher average premiums, in the case of both single and family coverage when compared to the overall average premiums.

For a single PPO plan, the overall average annual premium cost is $7,880, while for a family plan, it is valued at $22,248. On the other hand, the averages of an HMO plan are lower- $7,238 for a single plan and $20,809 for a family plan.


Deductible costs

If you have a PPO plan, you will be dealing with an annual deductible, which is essentially the money that you must pay out of pocket before anything is covered by your insurance. It was found out by Insure that the overall value of deductibles can fall anywhere between $1,701 and $4,000 in the case of high deductible health plans.

For instance, an individual’s PPO plan has a $2,000 deductible. Now, in case they break their leg in January, and the overall cost of the treatment is $850, the entire amount must be paid out of pocket, as they haven’t yet paid $2,000 worth of medical expenses during that year.


Conclusion

If you are hoping to make an apt decision for both you and your family, the first step involves comprehending the advantages and disadvantages of various health insurance alternatives. In case you are looking for a particular health plan that is flexible and you are comfortable paying a little more for this advantage, a PPO plan is a great choice.


Contact us at (212) 365-4553 or info@bentonoakfield.com to learn more.

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