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Should I Select a PPO For My Health Insurance?

written by: Eric Stolze•edited by: Jason C. Chavis•updated: 6/29/2011

Preferred Provider Organization, or PPO may cost more but allows more options. Is this the right health insurance coverage for you? Read on for helpful hints about the value of PPO coverage.

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    What is a PPO?

    A Preferred Provider Organization, or PPO, is one of the more popular types of health insurance. A PPO health plan includes a health care provider network called a PPO network.

    Doctors and other health care professionals join a PPO network by entering into an agreement with the PPO. Doctors who participate in a PPO network have their names, contact information and medical specialties listed in a network directory. Prospective patients who receive PPO health insurance coverage have access to the PPO network directory and can easily find participating doctors.

    Hospitals and other health care facilities can also participate in a PPO network. A person who has health insurance coverage through a PPO can also find participating hospitals and facilities in a PPO network directory. Patients can plan surgeries and other hospital visits by knowing in advance which facilities belong to their PPO.

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    Why Choose a PPO Over Another Type of Health Insurance?

    A PPO does not restrict a patient’s choice of doctor. Unlike a PPO, some other types of insurance plans refuse to cover visits to a doctor who does not belong to a network. A patient who belongs to a PPO can receive some PPO coverage for visits to almost any doctor, even if the doctor does not participate in a network. A PPO often does not require a patient to get a referral from a primary care doctor before the patient sees a specialist. The patient can go directly to a specialist without involving a gatekeeper.

    The PPO does provide an incentive for people to use PPO participating doctors by requiring lower co-payments and lower coinsurance amounts when visiting PPO participating doctors. For example, a PPO might cover eighty five percent of the cost to visit a doctor who is in a PPO network. The PPO might only cover fifty percent of the cost to visit a doctor who does not participate in a PPO network.

    The ability to get coverage for a patient’s choice of doctors can make PPO coverage more expensive. Some other types of health care coverage can cover up to one hundred percent of the costs of visiting a doctor who belongs to another type of network such as a health maintenance organization.

    Some patients will select a PPO because they must have the freedom to see their choice of doctors. These patients value their freedom of choice enough that they are willing to pay the higher out of pocket health care costs that result from belonging to a PPO.