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Your Most Popular Insurance Questions
Answers For Health and Home Insurance
PPO (Preferred Provider Organization):
What Does It Mean?
PPO stands for Preferred Provider Organization. These organizations have contract agreements with the insurance companies. A PPO's big advantage is the rules are a little more relaxed than an HMO which means they tend not to be so restrictive. Fewer restrictions usually help the consumer, which is a good thing for you.
PPO’s allow you to see whichever doctor you like. This is a huge advantage to many people, especially the elderly and those with young children. Repetition is very important to those with children and the elderly since they usually feel more comfortable going to a doctor they trust and will tend to be more open with that doctor or hospital. If the patient chooses and out-of-network physician, they will have to pay a higher out-of-pocket expense but doesn't need a referral to see a specialist.
Many times life’s financial situations determine our choices and health care is no different. HMO's are a lot cheaper but if you want input into your healthcare choices and the services you will be receiving then the best choice is a PPO. PPO’s give the consumer basically total control over his or her needs when it comes to their health.
PPO's were created originally to give a big group lower rates for health care coverage and to gain a growth in business for their organizations. Many reasons that PPO's have been so successful are the many things that they have been able to do within their organizations. A lot of times second guessing is never needed with a PPO, as more detailed information is available to PPO doctors. This helps cut down the costs for medical insurance for the group of a PPO.
Many PPO's were credited with reducing the rapid rise of medical expenses in the 1990's, however with expansion, a lot of PPO's joined each other to make larger companies, which doesn't necessary help the health care consumer. PPO's usually require insurers to pay a claim in a certain time frame to be eligible for the
PPO discount. PPOs goal was to make things simpler but now it seems maybe the opposite is true. PPO's have great power in getting cheaper prices for their customers in the already complex health care system in the United States.
Let’s now look at some common rules and questions many people have about PPO's. One of the most common questions people ask is “What if there isn't a provider in my area?” Under most PPO plans you are given the standard benefit for someone who is local. Prescription drug programs are covered in PPO's and have two different coverage options. One is to get them at your local pharmacy and the other is to search online and purchase them.
Many people don't realize, and this is probably one of the more important rules of a PPO, certain services must have prior approval before the service is rendered. One reason for this is that there is nothing more horrible than going through an operation and finding out after recovery that without prior approval no payment will be made. Doctor visits which use the co-pay option is another reason people love PPO's.
PPO's also have a yearly deductible which basically means even though you have a co-pay there is a certain amount you must reach before they PPO will start paying for the medical fees. Most PPO's will pay 80% of the medical bills as long as you use the in network physician. PPO's offer flexibility that other plans just can't offer you. Usually the overall premium is cheaper for PPO than it is for other traditional plans and also for health insurance. One important thing to remember is any work done outside the network will cost you a lot more money. It's best to try and fine providers close to you or in the network.
So if you want to control more of your health care decisions then a PPO is probably one of the best choices for you and your family. PPO's are a natural choice for most Americans, it could be the best choice for you too.
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