Preferred Provider Organization (PPO) - Glossary (2024)

FAQs

Preferred Provider Organization (PPO) - Glossary? ›

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network.

A type of medical plan in which coverage is provided to participants through a network of selected health care providers, such as hospitals and physicians. Enrollees may seek care outside the network but pay a greater percentage of the cost of coverage than within the network.

There are two types of Medicare PPO plan: Regional PPOs, which serve a single state or multi-state areas determined by Medicare. Local PPOs, which serve a single county or group of counties chosen by the plan and approved by Medicare.

What Are Disadvantages of PPO Plans? PPO plans tend to be more expensive than other managed-care options. They typically have higher monthly premiums and out-of-pocket costs, like deductibles.

◊ PPO is an abbreviation of “preferred provider organization.” — compare hmo.

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network. You can use doctors, hospitals, and providers outside of the network for an additional cost.

Doctors often prefer PPOs because they offer greater reimbursem*nt rates compared to HMOs and have less administrative paperwork. Is a PPO a good thing? For many, a PPO's flexibility and coverage make it a favorable choice, but it comes with higher premiums.

Preferred Provider Organization (PPO)

A PPO is a type of health plan that offers members the most freedom to see providers in and out of the plan's network without referrals. While members can use providers outside the network, they will have higher out-of-pocket costs, and some services may not be covered.

Preferred Provider Organization (PPO): A type of health plan where you pay less if you use providers in the plan's network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.

Why would someone want a PPO? ›

PPO plans typically require higher monthly payments in exchange for increased flexibility. With a PPO, you do not need to maintain a primary care physician and can see a different doctor of your choice at any time, including specialists. This also means when you are traveling, you can receive care wherever you are.

PPOs offer more flexibility and allow out-of-network care, but that type of care typically comes with a higher cost. Which type of health plan is right for you depends on what you want to pay and whether you prefer a plan with fewer restrictions.

One of the biggest advantages of PPO policies is their flexibility. Given that PPO plans offer a larger network of doctors and hospitals, you have a lot of say in where and from whom you get your care. Any doctor and healthcare facility within your insurance company's network offers the same in-network price.

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network.

Preferred Provider Organizations (PPOs)

A PPO has a network (or group) of preferred providers. You pay less if you go to these providers. Preferred providers are also called in-network providers. With a PPO, you can go to a doctor or hospital that is not on the preferred provider list.

A provider who has a contract with your health insurer or plan to provide services to you at a discount. Check your policy to see if you can see all preferred providers or if your health insurance or plan has a “tiered” network and you must pay extra to see some providers.

HMO plans typically have lower monthly premiums. You can also expect to pay less out of pocket. PPOs tend to have higher monthly premiums in exchange for the flexibility to use providers both in and out of network without a referral. Out-of-pocket medical costs can also run higher with a PPO plan.

PPOs also tend to have larger networks than HMOs. The broad range of healthcare providers within a PPO network ensures a higher likelihood that the preferred doctor or hospital is in-network, reducing costs and facilitating convenient and familiar care.

Benefits of PPO health insurance plans

While PPOs offer the greatest savings when you use in-network providers, they also provide the option to receive care from out-of-network providers at a higher cost, giving you the freedom to choose the best care for your situation.

Benefits of EPO vs PPO

An advantage of a PPO over an EPO is that out-of-network providers are available. Unlike the EPO, where members are strictly held to a more narrow selection of health care facilities, physicians, and pharmacies, the PPO allows some coverage for out-of-network providers.