If you've been searching through your Medicare Advantage options, you know health insurance plans can sometimes feel like alphabet soup. PPOs and HMOs are the most common choices. But knowing which plan offers what service can get confusing.
That's why it's important to do some research first. PPO health insurance plans offer some benefits that appeal to many but may not be a fit for all. Here are a few things to consider about PPOs before you sign up.
1. PPO Health Insurance Operates Within a Network
PPO stands for preferred provider organization. It's a type of managed health care available to individuals and families. PPOs are available as part of a Medicare Advantage program.
As with HMOs (health maintenance organizations), PPOs operate on a network system. That means your provider has a network of doctors, specialists, hospitals and other care facilities who agree to be part of the plan to lower costs.
With a PPO plan, you'll have a lower co-pay if you stay inside your network when you need to see a doctor. However, if you go outside, you may need to pay more.
2. You Have More Flexibility
One of the biggest benefits of PPOs compared to HMOs is that they offer you much more flexibility. HMOs have stringent network guidelines, so if you go to see a doctor outside it (except in emergencies), you'll need to pay out of pocket.
With PPOs, you still have a preferred network. However, you can see doctors and specialists and visit facilities outside of it. Rather than you needing to foot the entire bill for these visits, your provider covers a portion of the cost.
3. There Are Out-of-Network Benefits
Health care networks are often based around the area you live in. And depending on where you live, some networks may be larger or smaller than others. Part of a PPO plan's flexibility is that it essentially removes restrictions around networks.
This may be helpful if you're someone who travels a lot. Or, if you have an out-of-state home that you visit during the winter months, you can still see doctors without getting penalized for being out of your plan's network.
4. You Don't Need a Primary Care Physician
For some, another benefit of a PPO health plan is you don't need to choose a primary care physician (PCP) for your care. Again, depending on your situation, this has advantages and disadvantages.
For example, you may like the flexibility of not needing to run things by a PCP first. On the other hand, PCPs often serve as the point person for your care, so without one, you may need to manage things primarily on your own.
5. You Don't Need a Referral
With HMOs, you need to visit your PCP and get an in-network referral from them if you need specialized care. PPO plans remove that requirement.
So, if you need to see a specialist, you don't need to get a referral from your PCP for that care. Instead, you can visit the other doctor when you want. In some cases, this may help avoid wait times.
6. You May Have More Paperwork
While PPOs give you more flexibility in choosing your care, they also mean you are more responsible for managing it than those in HMO health care plans.
For instance, if you go out of network, you may still have to submit claims paperwork to your insurer for care, set up appointments and keep track of your visits. With HMOs, much of that is typically managed by your PCP.
7. Costs May Be Higher
Depending on the type of plan you select, you may find that PPO plans tend to have costs that run a bit higher compared to HMOs. According to the Kaiser Family Foundation, annual PPO premiums tend to cost more than HMOs.
In addition, most PPO plans have an annual deductible — money you need to pay out-of-pocket before your insurer covers the rest of your care. Finally, don't forget that if you go out of network, you'll also likely pay a larger co-pay than if you stay in-network.
Make the Right Choice for You
No health insurance plan is one size fits all, so you have to look at the pros and cons of each and make the choice that works best for your needs. As you're reviewing your options, explore the insurance plans available to you and compare your needs.