Pros & Cons of PPO Insurance Programs

Choosing the right health insurance can make a significant difference in the cost and quality of your medical care. The most common plan types are health maintenance organizations and preferred provider organizations. Both HMO and PPO plans feature a network of hospitals, doctors and specialists that provide patient care. Enrolling in a PPO health insurance plan offers some advantages over an HMO plan; however, there are a few drawbacks to consider.

Preferred provider organization plans are substantially more flexible than other types of health insurance plans. With an HMO plan, you're typically restricted to visiting only physicians or health care facilities within the network. A PPO plan allows you the option of seeking care from doctors, hospitals and specialists both inside and outside the network. Unlike an HMO plan, you're not required to choose a primary care physician. This means that if you need to see a specialist, you won't have to seek a referral from your primary care doctor first, but if you don't select a PCP, you may lose out on wellness programming offered by the physician and the insurer.

Preferred provider organization plans also cover a wider ranger of services than an HMO plan. Generally, a PPO plan will cover preventive care, including routine check-ups and physicals; hospitalization and emergency care; prescription medications; outpatient surgery; and treatment from specialists. Depending on the plan you're enrolled in, you may also be covered for alternative medical care, such as acupuncture, therapeutic massage, naturopathy and chiropractic visits. Your plan follows you wherever you go, which means you'll be covered if you have to seek medical care while you're traveling or you need to see a specialist who's a significant distance from your home.

One of the most important things to consider when choosing a PPO plan is the cost. With this kind of plan, you'll typically be responsible for a co-payment when you visit an in-network doctor. They may be as low as $10 or $15 but over time, they can add up. If you go to a doctor outside the network, you may have a higher co-pay and you may have to pay a larger percentage of the total bill. You'll also have to pay an annual deductible for your coverage. According to a September 2012 article from Consumer Reports, deductibles for PPO plans can range from $250 to $1500 but you could end up paying more, depending on your plan. Your coverage won't kick in until you've met the plan deductible for the year.

Another drawback of a PPO plan is the hassle of filing your own claim paperwork. When you visit doctors, hospitals or specialists in the network, your health care provider is responsible for filing your claim paperwork and providing your insurer with any necessary documentation. When you go outside the network for care, you assume responsibility for making sure the insurance company gets everything their agents need to process your claim. If you have a major health problem that requires several doctor visits, filing the appropriate paperwork could quickly become a nightmare.