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How Do PPO Deductibles Work?

Deductibles vary between preferred provider organizations (PPSs), but you generally pay your deductible amounts directly to your medical provider at the time you receive service. Your health or dental insurer receives claims from your provider indicating how much you have paid toward your deductible, and your amount owed for that year is reduced.

  1. PPO Basics

    • A PPO is a three-party contractual arrangement that includes the insurer, providers and members. Insurers contract with medical providers that agree to contract fees in exchange for inclusion in the insurer's network. Members benefit from more affordable health coverage by selecting in-network providers.

    Deductible Basics

    • A deductible is one of the common out-of-pocket expenses insured people are expected to pay. Others are co-insurances and co-payments. Deductibles are amounts the insured must pay before benefits are paid. Some insurance plans have general deductibles that apply to all types of treatment. Others have deductibles that are applied to certain types of coverage. For instance, some insurance plans attach deductibles to hospital emergencies or surgical treatments.

    PPO Deductible Process

    • PPO deductibles are often paid at the point of service. One common trait of PPO insurance is that members are generally not involved in the claims process. Providers submit claims directly to the insurer. Typically, when an appointment or medical treatment is scheduled, a billing receptionist or manager with the provider checks your insurance to determine the contract fees and your deductibles, co-insurance and co-payments. If you owe a deductible, you are informed of this and usually asked to present payment at the time of service.

    Other Insights

    • If you have a $250 deductible on hospital-based procedures and the total fees are $4,000, your deductible and any co-insurance or co-payments are charged or billed to you at the point of service. The remaining balance is submitted to the insurer for payment. You have met your deductible for that year. At the point of your annual coverage renewal, your deductible requirement starts over.

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