In this 3-part series, we’ll explain 3 different types of health insurance plans: CDHP, PPO, and HMO. Last week we explained the CDHP plan. Today, in Part 2, let’s talk about PPOs or Preferred Provider Organizations.
What is a PPO?
A PPO, preferred provider organization, is a very commonly used type of health insurance plan. Your insurance company contracts with a large group of doctors, hospitals, outpatient facilities, etc. that agree to discount their services in exchange for steering patients to them as part of a network. Once that network is established, you can choose any provider in that network.
PPO plans usually have a higher premium than an HMO (which we’ll talk more about next week), but you get more flexibility and options. You can choose to receive care from any doctor or hospital in your network.
If you choose to go out of network, your costs will be much higher, but most of the time you’ll still get some coverage from your insurance plan.
No Referrals Needed
Another great thing about the PPO is that you don’t need a referral. If you need to see a specialist, you can do your research, find your provider, and make an appointment without having to get a referral from your primary care doctor.
Deductibles Are Going Up
Last week we talked about CDHPs, consumer directed healthcare plans, which are commonly known for their high deductibles. PPOs traditionally have had lower deductibles, but as healthcare costs rise, we’re seeing more PPOs with $800 deductibles (for an individual plan, family plans are even higher) – something we would have not seen 5 years ago.
- Stay In Network
Even though you can see an out-of-network provider, try to stay in network whenever possible. You’ll pay MUCH more for an out-of-network provider.
- Keep Track of Your Deductible
There can be up to a 120-day lag for your medical claims to make it through the system and show up in your account information. Don’t get stuck paying part of your deductible twice.
- Get Necessary Pre-Approvals
You may still need a prior authorization for an outpatient surgery or pre-certification for physical therapy. Don’t assume your provider has taken care of this for you. Without proper authorizations, there’s a good chance your claim will be denied, meaning you pay the entire bill yourself.