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Pros & Cons of PPO Insurance Programs

Two of the most popular managed health care plans are health maintenance organizations, or HMOs, and preferred provider organizations, or PPOs. Both plans provide the people they cover with the option of visiting doctors and other medical specialists who are members of their network. However, while HMOs require people using their plan to visit providers in their network, PPOs do not. PPO users are free to visit other providers, but will have to pay more for their services than for in-network providers.

  1. Pro: Access

    • The main advantage of a PPO is that you can see nearly any doctor you choose and still remain covered. This increased access has a number of advantages. For example, if you have developed a relationship with a particular provider or require treatment for a specific condition, you do not have to stop seeing that provider if he adopts a PPO plan.

    Pro: Alternative Medicine

    • According to the online insurance broker Insure Lane, PPOs cover visits to many practitioners of alternative medicine, such as chiropractors and acupuncturists, more often than HMOs do. Depending on the cost of the therapy, paying for alternative treatments can be prohibitively expensive under an HMO.

    Pro: Primary Care Physician Not Required

    • According to the reference website Health Insurance In-Depth, many HMOs require that their clients select a primary care physician. When sick, a patient covered by an HMO may be required to consult this primary care physician first, who will then direct him to a specialist if necessary. PPOs, by contrast, do not require that their clients see a primary care physician first, but allow them to go directly to a specialist.

    Con: Cost

    • In exchange for the expanded coverage, PPOs are generally more expensive than HMOs. According to Insure Lane, monthly coverage for a PPO will be higher than for an HMO, and many clients will have to pay a deductible of between $500 and $2000. According to the insurance provider CompuQuotes, the benefits provided by PPOs are also slightly less generous.

    Con: Complicated Billing

    • The difference in billing practices between HMOs and PPOs reflect their different approaches to managed care. Because HMOs generally require patients to be approved before receiving certain services, HMOs handle most of the billing. However, with PPOs, which allow clients to choose their own providers, the onus is often on clients to handle the invoices for their treatment, particularly if they have seen a non-network provider.

    Con: Out-of-pocket Costs Limited

    • Although PPOs extend coverage to out-of-network providers, there may be caps on the yearly amount of services that a client can receive from them. For example, a PPO may allow clients to be covered for only the first $10,000 worth of out-of-network treatment, requiring them to pay for additional expenses out-of-pocket.

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