subject: What is PPO Health Insurance? [print this page] What is PPO Health Insurance?
Health Insurance Plans are basically of two types. One category of the health care plans is free for service health insurance while the other one is the managed health care insurance. As far as the second category of the plan is concerned, it has a distinct health net called the Preferred Provider Organization or the PPO. In this article here we will discuss what the PPO health insurance means in the first place, along with its associated advantages and disadvantages.
Fee for Service Plan: In this particular plan what basically happens is the patient who is insured is examined by a certified medical practitioner who is also selected by the patient. In the process, every time the medical professional provides the insured individual with the service, he receives a particular amount as the fee. The claim for the fee for the health service can be filled in either by the doctor or the insured individual.
Managed Care Insurance Plan: The Managed Care Insurance Plan is also an equally popular insurance scheme. Many of the policies in this category work in variant ways. Hence different plans provide different monetary incentives to the policy holders to choose from and employ the providers mentioned in the Managed Care Plan. Some of the common categories included in the list are,
Point of Service Plan or the POS Plan
Health Maintenance Organization Plan or the HMO Plan
Preferred Provider Organization Plan or the PPO Plan
The PPO plan is to a large extent similar to the Indemnity Plan. The Preferred Provider Organization opts to enter into a contract with the various medical service providers and the hospitals who would agree to charge reduced fee to the policy holders. Thereon if the policy holder seeks medical service and treatment from any organization or professional who is outside the network of the PPO, the rate of cost sharing increases than what he or she would be paying to anyone within the network.
Another interesting feature of the PPO is the fact that the insured person in this case enjoys the liberty to make referrals after consultation with the doctors who are originally outside the network. But then one point that needs to be remembered is that the policy holder will be only reimbursed for 70% of the total expenses by the insurance company. In addition they would also be required to meet the gap in the charges between what the providers charge and what the insurance plan originally offers.
The PPO Health care plan is like a blend of the conventional Indemnity Plans and the Health Maintenance Organization Plan. In fact it strikes a very balanced combination between the two. The net in a PPO health plan at all points of time aims to create a widespread network of medical professionals and hospitals which is actually similar to the HMO Plan. All the doctors and medical institutions in this net agree to decrease the amount of fees that they charge from the members of the PPO in return for a number of patients to whom they are referred.
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