What Is a PPO Plan?


Quick Answer

A preferred provider organization, or PPO, insurance network is a three-party group insurance structure. A person covered by a PPO plan has "network" insurance coverage from general and specialist medical providers. In-network providers agree to contracted service rates with insurance companies in exchange for participation in the PPO plan.

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What Is a PPO Plan?
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Full Answer

Under a PPO plan, a covered person doesn't typically need a referral to see a medical specialist. This factor is a key distinction from health maintenance organization policies, another common group network plan. When a PPO member visits an in-network provider, that person typically just pays a co-payment for the visit. For certain types of treatment, such as hospital-based surgical procedures, an insured person may also have to pay an annual deductible before benefits kick-in. PPO policies may also include coinsurance, which is a percent of the remaining bill that is paid by the insured person.

While PPO members may elect to see a provider outside of the coverage network, benefits eligibility is often not as strong, and the out-of-pocket cost is often higher.

A key benefit of the PPO structure is that the insured person doesn't normally file a claim to get benefits. Instead, the provider submits a claim to the insurer for services.

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