A Preferred Provider Organization (PPO) plan is a common form of group health insurance that people with jobs that offer health benefits will have access to. The Kaiser Family Foundation1 (KFF) reported that among the nearly 155 million Americans with access to health insurance through their employers, 46% are enrolled in a preferred provider organization (PPO) plan.

A PPO may be a common health insurance option in the United States, but it’s not without its negatives We’ll go over the pros and cons of PPO plans so you can decide if they’re the right choice for you and your family.

Exactly what is a PPO plan, and how do they work?

A PPO plan is a type of health insurance that establishes a network of “preferred” providers by entering into contractual agreements with general practitioners, specialists, and healthcare facilities.

In-network providers are doctors, hospitals, and other medical establishments that have contracted with an insurance company to provide their services to plan members at a discounted fee. Participants are directed to “recommended provider lists” that detail in-network doctors and hospitals.

When employees see a doctor who is part of their insurance network, the insurance company pays the doctor the discounted rate, and the patient is responsible for any out-of-pocket costs beyond the deductible. A PPO plan allows for out-of-network care to be received, but employees must use in-network providers in order to receive maximum reimbursement for medical expenses.

Advantages of a Preferred Provider Organization

Having a PPO plan can make it easier to get the medical attention you need.

Liberty of Option

If you have a PPO plan, you have more flexibility in choosing your doctor and hospital, as the network is bigger. The in-network cost of medical care is the same regardless of which doctor you see or which hospital you go to.

In addition, you have the freedom to choose the primary care physician of your choice. Those who regularly change locations may benefit greatly from this service because they will have easier access to medical care when they are sick or injured.