Overview of Insurance Policy
A PPO or preferred provider organization is a health insurance plan built around using your insurer's system of designated doctors, specialists and hospitals. These medical providers are obligated by the insurance company to follow the price policies that were part of your agreement plan with the insurance company. By doing so, doctors can improve their business through referrals from these insurance companies. The two act as mutual beneficiaries of your PPO plan. They also are a great asset to the client in that they offer a ranging availability of coverage for various medical services. Not only do they cover a high percentage of their network's costs, they also cover non-network medical service providers, but do so at a lower rate.
Fees
Depending on the company and type of plan, you will most likely have to begin paying a yearly deductible expense before the health insurance company will feel comfortable covering doctor's visits. Once that annual fee has been met, the insurance company will cover a large percentage of costs to those primary medical practitioners in their network. The only fees that the insured person will have to account for are co-pays. Co-pays are a set fee to be paid when attending one of the insurance company's network doctor's offices. These plans also thrive in their ability to offer partial coverage for non-network visits. This gives the client a little more freedom and flexibility in choosing the best doctor, without fear of having to pay outrageous fees.
Policy Shortcomings
Despite this system's excellent benefits in flexibility, there is a catch. When dealing with non-network costs, it is up to the insurance company to calculate the total coverage and amount of costs that they can supply you with, leaving the difference to be covered by you. There have been many claims questioning if insurance companies undercut their clients when "calculating" the costs associated with non-network medical services. Many insurers keep these calculated estimates of medical costs in databases not open to the public. This tends to leave insurance customers wary of just how flexible their plans really are.
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