Preferred Provider Organization (PPO) plans are designed to give the patient more flexibility in treatment options. A combination between HMO plans and Indemnity plans, the PPO attempts to find a way to bring together the best of both plans.
PPO plans have a network of doctors similar to a HMO plan. This network of care physicians agrees to reduce their fees for PPO members in exchange for the potential for a larger volume of new patients.
While members of a Preferred Provider Organization are encouraged to use the services of these doctors, they are not required to. A patient may choose to visit another doctor who is out of the network but if they do they will probably be responsible for higher out of pocket cost.
Enrollment in a Preferred Provider Organization plan involves a monthly premium payment, as part of the annual membership cost. Those who receive their health care insurance through an employer will typically have the premiums deducted directly from their paycheck. For most, this deduction comes from their gross pay before taxes are removed, effectively reducing their taxable income and helping to elevate a small percentage of the healthcare cost.
Also by offsetting the cost of health insurance are the contributions made by the employer if purchased through work. Most employers will pay some portion of the premium for their employees as part of the total compensation package offered. See your Human Resources dept head for details of what your employer may offer.
Depending on the geographic area and the insurance company providing the PPO plan, a subscriber may find that his or her existing primary care physician is a member of the network.
If your doctor is not a member, you may opt to find a doctor that is associated with the PPO plan. A network primary care physician has agreed to offer services at a discounted rate.
Using your health coverage to seek medical treatment usually involves a paying a deductible or co-payment at the time of the visit. This payment helps to offset the overall cost of the medical coverage, by charging on a per use basis. Those who need frequent medical attention will pay the same premium as those who do not, but they will pay more co-payments.
The same principle applies to having prescriptions filled and for hospital visits. While prescription drug payments are normally less than that for office visits, those who need more prescription medication will pay more toward the medical plan through co-payments.
Hospital co-payments are usually much higher than office visits or prescriptions. Since an emergency room visit or hospital stay comes with a significant price tag, the co-pay for these services is meant to be more of a deterrent than to help offset cost.
While no PPO health plan would deny a subscriber treatment, to help reduce cost, they try to encourage the ensured to seriously consider the need for emergency treatment over waiting till the next business day to see their primary doctor.