Understanding Your New Health Plan: PPO
In our last blog post, we took a look at the features of an HMO and discussed ways to save on associated out-of-pocket costs. Next up, another popular type of managed health plan – a PPO.
Similar to HMOs, with PPOs, (Preferred Provider Organizations), the health plan contracts with a group of providers and facilities to create a network. Unlike HMOs, PPOs offer coverage for medical care that’s in and out of that network. One of PPO’s defining characteristics is more choice.
Choosing a Health Plan: HMO vs. PPO
So how do you know which to choose? We break it down for you below:
PPOs usually have higher monthly premiums than HMOs, but lower deductibles. You’ll pay more upfront but if you are expecting a certain amount of utilization, PPOs can save you money in the long run. Many PPOs charge copays and coinsurance, just like HMOs. These tend to be a little higher, too.
Typically, a PPO offers a larger network of physicians and facilities than an HMO. And, you don’t need a PCP’s (primary care physician) referral to see a specialist. This way, beneficiaries can bypass a step and seek care without a pre-authorization for treatment.
Usually with a PPO, out-of-network care is covered too. At least to a certain extent. Services outside your network might be partially covered or discounted, as opposed to an HMO, where beneficiaries are expected to pay for anything out-of-network themselves.
Let’s recap. While HMOs might be more affordable, PPOs can offer choice and flexibility. Consider your health needs before selecting your plan. Are your preferred providers in network? Do you expect to meet your deductible for the benefit year? If you know you’re a high-utilizer or will be seeking out-of-network care, the flexibility of a PPO could be the better choice.
Have a Question About Your PPO?