How PPO Health Plans Work

Preferred Provider Plans let their members have access to superior healthcare and save money by creating networks of doctors, hospitals, and other care providers. By using their large buying power, the plans are able to lower their members’ healthcare costs.

In a PPO network, the plan “administrator” (usually an insurance company) negotiates with providers to offer their services for lower fees. In return, the providers see more business — since being a member of the network means free advertising and referrals.

Plenty Of Providers To Choose From

When you enroll in a PPO plan, the insurer will give you a list of providers to choose from.

PPO plans usually have very large networks of providers — some have networks of over 50,000 doctors. So finding a doctor usually isn’t a problem for plan members.

What if you already have a doctor who isn’t in the network? One of the advantages of PPO plans is that you can go outside the network for care, and still get some coverage. That means you can continue to see your doctor, and the plan will pay some of the fee. But you’ll always save more by choosing a doctor within the network.

Limitations Of PPO Plans

One of the ways PPO plans maintain low costs is through utilization review. That means the insurer examines records about the care you were given to make sure that the treatment was necessary before they will cover it. The plans consider this a way of controlling costs — and in fact PPO plans are credited with slowing the rising cost of medical care in the 1990s.

But many providers consider utilization review to be “second guessing” their professional judgment, and refuse to participate in PPO plans. And in some instances, non-emergency hospital visits and procedures are subject to “pre-review,” and may not be approved for coverage.

There are also plans known as Exclusive Provider Organizations, or EPOs. These plans are very similar to PPOs, with one major exception: in and EPO plan, you won’t get any coverage for using providers outside the network.

Despite these limitations, many people find that PPOs are a good choice for them.

If you’re ready to start talking to professional insurance agents, get free quotes now. We’ll match you with agents in your area, and you can explore your options.