What is a PPO?

Everyone knows that the first day on a job can overwhelming. But perhaps one of the most difficult aspects of working for a new employer is selecting working with a new health care plan. Do you know the difference between a PPO and other health insurance plans? Read more to find out the basics you need to know about PPOs.

A PPO, or preferred provider organization, is a type of managed health-care system. PPOs tend to have higher monthly premiums than other types of managed health care plans. However, for the additional fees you may pay, you get freedom. PPOs include the option to choose the doctors you want without limitation, allow you to see specialists without needing to get a referral first, and ultimately will not limit you to in-network coverage.

Many people like the flexibility of PPO plans because they have the ability to choose doctors that they already have established relationships with. However, because of the flexibility, PPO plans may cost more not only in monthly premiums, but also in the form of higher deductibles that have to be met before the insurance company starts paying for your benefits.

PPOs are a kind of health plan that act like a combination of an HMO plan and a fee-for-service plan. Like an HMO, PPOs usually offer a network of doctors for consumers to choose from. Visits to those physicians are less costly than choosing out of service doctors. However, the flexibility of choice like a fee-for-service plan is the big draw for many consumers choosing to join a PPO. That portion of the plan allows the flexibility many consumers desire when it comes to their health care.