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What is PPO?

Health insurance plans come in a number of varieties, but one of the most common is the PPO (Preferred Provider Organization). Basically, a PPO is a type of managed health care plan. To decide if a PPO is a good choice for you or your family, you need to know what differentiates these managed care plans from the alternatives.

Advantages of a PPO

Before you look at the advantages of a PPO, or Preferred Provider Organization, you need to understand what makes them different from other types of health care plans. First, you have more choices when it comes to physicians. With an HMO (Health Maintenance Organization), you must choose a primary physician from a select list. In comparison, a PPO does not limit you to a certain hospital or certain set of doctors. Instead, you can choose to go to almost any medical facility or provider.

With an HMO , if you choose to use a physician who is not part of the program, then none of those costs are covered. If you have a PPO, a portion of your out-of-network medical costs will be covered. For example, with a PPO you can go to Doctor A who is in the network (meaning he or she has negotiated with the PPO to accept lower fees for his/her services) and pay only 10% of the cost. On the other hand, you can choose to go to Doctor B who is not part of the network and pay 30% of the cost. Although most PPO members do choose in-network medical providers, having the option of going elsewhere is appealing to many consumers.

Another difference is called self-referral. With HMOs, you need a referral from your primary physician to see a specialist. If he or she doesn't think you need to see a specialist, then you either don't see one or you see one and pay the bill out-of-pocket. If you choose a PPO, however, you have the freedom to make self-referrals. That means you decide if and when you want to see a specialist.

Disadvantages of a PPO

Like most managed care plans, PPOs do have disadvantages. One deterrent to selecting a PPO is the price. Because PPO's offer so much flexibility, you usually have to pay more. The deductibles associated with these plans are generally higher and so are the premiums. When you're comparing plans, resist the temptation of looking at only the premiums. Low premiums may not be worth it if you have to pay a higher deductible, larger co-payment, or a bigger chunk of co-insurance.

Plus, you will be expected to make co-payments when you visit the doctor, purchase prescriptions, or have medical tests. The co-payments generally range in price from $10 to $30. While those prices may seem low, they do add up. In most cases, however, your co-payments count towards meeting your deductible for the year. Make sure to review the details of your policy before making any medical appointments or purchases so you don't end up incurring costly and unanticipated medical costs.

So is a PPO (Preferred Provider Organization) right for you? That depends on whether or not you're willing to pay extra for the freedom to choose your physicians. The bottom line is that you need to decide what is most important for your family and which type of plan will work best with your budget.

That's where we come in, VitalOne offers superior customer service to help you decide what type of healthcare plans are right for you.

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