PPO Health Plans
Preferred Provider (PPO) plans

A PPO or preferred provider organization is considered a managed care group of doctors and hospitals which have been contracted to provide reduced rates to the group. These groups are contracted to insurers or third party organizations to save both the insurer and the insured money.

What is the difference between a PPO and a POS plan? A POS plan has primary care physicians who coordinate patient care and for the most part PPO plans do not.

Unlike most HMOs, with a PPO or a POS you will get some reimbursement if you receive a covered service from a provider who is not in the plan. Choosing a provider outside the plan's network will cost you more than choosing a provider in the network. Thus when going outside the network these plans will act like a fee-for-service plan and charge you a co-insurance fee.

In Review:

Why some people like PPOs better than HMOs

PPO health plans are a better choice than fee-for-service plans if you don't make a lot of money but you want to have some flexibility in your choice of physician. They are also good if you have built a relationship with a physician not in the network and want to continue that relationship. You can still use preferred providers for the other services and keep seeing your specialist. PPO health plans are also good when you know you will exceed the deductible amount. However, if you don't exceed the deductible, you will basically be getting no value out of your insurance because the deductible amount must come out of your pocket before your insurance company starts paying.