Preferred Provider Organizations, also known as a PPO. These organizations work as a mix between fee-for-service plans and an HMO because they give you the possibility to choose from a specific list of doctors. In essence, you still hae a provider network that you have to choose from, but this plan does not prevent you from going to see a doctor that is out of your network. As always there is that question regarding, “how much is health insurance“. Under PPOs, going to see out of network doctors just increases your out of pocket expense. Like the HMO plans, this type of healthcare plan is also cost effective as long as you stay in network. Another distinct advantage of this type of plan is that you are free to go see a specialist without a referral from your primary care physician.
One part of PPO plans that get tricky is the fact that there is an inherent limit on what the insurance company will pay. If you happen to have a doctor that charges substantially higher fees than the average doctor, then you will be on the hook for more of the cost, depending on the insurers exact terms. This type of extra payout from YOU happens as a result of your doctor charging higher than what your insurance company deems as reasonable and customary for the procedure.
What is the difference between PPO and HMO plans?
In short, the difference between PPO and HMO plans is very simple. HMO plans are generally cheaper, but more restrictive in terms of which doctors that you can see. If you happen to break the rules and go outside of the network, then you are on the hook for the full amount.
PPO plans still have a network that you SHOULD choose from, but give you the option of seeing out of network doctors at a higher cost. (usually through a set deductible, higher individual % contribution, or even a higher copay)