Health Insurance Articles
The Disadvantages Of A PPO Health Insurance Policy
2010-02-03
Choosing the right health care coverage can be a daunting task. HMOs, PPOs, and self-directed plans- the options are sometimes overwhelming. Most people will have a health insurance policy through their employer, and it will most likely be either an HMO or PPO. But while many people have heard these terms, it can sometimes be difficult to distinguish how they differ, and what exactly they each bring to the table.
PPO is an acronym for "Preferred Provider Organization". In this type of health insurance plan, there is a network of physicians and specialists, which are known as the preferred providers. Clients do not need to pick a primary care physician and can see any doctor within the network at a cost that is at least partially subsidized by the plan. PPOs also make much of the fact that doctors outside of the network can been seen as well, and that no referrals are needed to see a specialist, often in an attempt to distinguish them from HMOs. However, any visit to a care provider outside of a PPO's network will either not be covered by the insurance policy, or will only be covered for a small portion. Also, many specialists require referrals from another doctor, whether their plan permits them to omit that step from the process or not.
PPOs have higher premiums than traditional HMO plans and will often feature the concepts of both a deductible and coninsurance. This deductible means that a certain amount must be spent on health care per year by the client (and paid by them directly) before the PPO plan will begin paying out for additional services. In a PPO plan, this deductible can range from $250 to $5000. Also, if the plan features coinsurance, it will cover only a portion of the costs of even a network health care visit,-usually around 70 to 80% -leaving it up to the client to come up with the remaining amount owed. And although many PPOs claim that no referral is necessary, some more expensive procedures, such as an MRI, will require contacting the insurance provider for approval, even if the service lies in the preferred network.
While PPO health care can be beneficial in some respects, it often limits choice even while appearing to allow more freedom and is more expensive on a monthly basis as a result. Although the idea of not requiring a primary care physician and having quicker access to services and procedures is appealing, these can often take longer to obtain and can be more expensive than other traditional health care plans.
