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Preferred Provider Organization (PPO)

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Spotlight on: PPO Health Insurance

Short for preferred provider organization, a PPO is a popular personal health insurance option for individuals and families looking for coverage for their health care and prescription medication needs.

Essentially a network of medical providers and facilities that agree to offer services at a pre-negotiated rate, a PPO can help save you money on health care.

After purchasing a PPO policy, you make a premium payment in exchange for reduced rate medical services.

Premiums are typically paid monthly, with the option to pay bi-yearly or annually in most cases. When you need to visit a doctor or specialist, you are usually responsible for an up-front payment known as a copay.

Once you meet the agreed-upon threshold of out-of-pocket financial responsibility known as a deductible, most PPO plans will pay for the remaining care throughout the policy period. While many options eliminate the copay after you meet your deductible, some plans maintain copay requirements throughout the duration of the policy. 

Why Higginbotham? Because we care about your people like you do.

Whether you’re just here to learn the difference between a PPO and HMO, or you have questions about options suited for your lifestyle, our seasoned health insurance specialists are here to make PPOs easy.

We take the time to get to know you by name and nuance to help ensure we deliver options that make sense for your needs.

And our work doesn’t stop after coverage is placed.

We stand behind you every step of the way to help make sure you get the most out of your health care coverage.

Because while insurance is our something, our customers are our everything.

To learn more about how our values-based approach creates value for you and your business, click here.

Or visit our Insights page to learn more about PPO health insurance.

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If you’re interested in learning more about health plan options, our benefits specialists are ready to talk.

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Work with a broker who cares about your people.

Starting with listening and ending with customized solutions, our PPO health insurance policies are designed with you in mind.

Whether you’re shopping for coverage for yourself, your family or your employees, Higginbotham’s seasoned team of health insurance specialists is here to help answer your questions and take the guesswork out of securing coverage.

Because the peace of mind and wellbeing that health insurance can offer is priceless.

What’s the difference between a PPO and HMO?

If you’re considering health insurance, you’ve likely heard the term HMO. Short for health maintenance organization, an HMO functions much in the same way as a PPO, with a few key differences.

Perhaps the most significant difference between HMOs and PPOs is the avenue each plan provides for accessing care. 

While a PPO allows you to visit in-network care providers of your choosing, an HMO requires the election of a primary care physician (PCP) as a pre-requisite to specialist coverage eligibility.

After you choose a primary care provider, that provider acts as a portal of care for specialist appointments and other medical services. 

In other words, to qualify for specialist care coverage, you first need to visit your PCP to assess your medical needs. If the primary care physician determines that a specialist appointment is necessary, the PCP will write a referral to a preferred provider in the insurance network, effectively activating coverage for those services.

On the other hand, a PPO doesn’t require a PCP referral as a prerequisite to specialist care coverage. Rather, you can elect to visit any preferred provider you choose. 

Another key advantage of a PPO plan is the ability to visit out-of-network providers. Though not all plans extend coverage for out-of-network services, some will pay for a portion of a visit to a non-preferred provider. This can be especially beneficial for people who travel frequently and those with above-average medical needs who may need to see a specialist unexpectedly.

Pregnant Woman With Headphones Using Laptop
Pregnant Woman With Headphones Using Laptop

What about POS and EPO Plans?

Though lesser known than HMOs and PPOs, point of service (POS) and exclusive provider organization (EPO) plans are two popular health insurance alternatives worthy of consideration.

Point of Service Plans

Though lesser known than HMOs and PPOs, point of service (POS) and exclusive provider organization (EPO) plans are two popular health insurance alternatives worthy of consideration.

Exclusive Provider Organization Plans

Like HMOs, exclusive provider organization plans will only extend coverage for visits to in-network care providers.

However, unlike an HMO, many EPO plans don’t require a primary care physician’s referral to activate coverage for visits to specialists. Exclusive provider organization plans also tend to maintain larger doctor networks compared to some HMO and PPO alternatives.

Why Would a Person Choose an HMO over a PPO?

Considering the many advantages that PPO plans can offer over their HMO counterparts, you may be wondering why anyone would opt for a health maintenance organization plan.

Simply put, the primary reason people go with an HMO over a PPO involves cost.

An HMO almost always has a lower monthly premium payment than comparable PPO plans. Adding that some HMO options also carry lower deductibles, the up-front cost of health insurance is often considerably less with these plans.

However, it’s important to remember that premium payments and deductibles are only part of the equation when it comes to calculating total health care costs.

Someone with a chronic condition or above-average medical needs may end up paying less for care on a PPO plan. In this case, the added cost of visiting a PCP for a referral to specialist care providers could easily eclipse the premium and deductible savings of an HMO plan.

Policyholders who travel frequently may end up with a lower total annual cost with a PPO plan if they frequently find themselves needing medical care away from home.

One final scenario in which a PPO may be more cost-effective is if you want to retain your out-of-network doctor when changing plans. In this case, a PPO plan that offers some degree of coverage for non-preferred providers could easily save you money over HMO alternatives.

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