Health Insurance: PPO

A PPO (Preferred Provider Organization) health insurance plan is similar to a traditional Fee-For-Service (Indemnity) plan in that you have unrestricted choice about what health care provider and facility to use, when to see or use them, and what kind of treatment you want. The only requirements are that the care you want has to be a covered benefit, and it must be "medically necessary."

With some PPOs, you pay health care bills directly to the provider and then seek reimbursement from the insurer less any co-payment percentage. In other cases, the doctor or other provider bills the insurer for payment. The insurer then pays the covered amount directly to the healthcare provider. You pay the provider the copayment amount.

The variation from a Fee-For-Service plan is that with a PPO, the insurance company contracts with a network of doctors and other health care providers (often including hospitals) to provide care for a discounted, set, pre-determined fee. PPOs encourage you to use network providers rather than one that does not have an arrangement with the insurer by requiring you to pay more for care not from the PPOs network of providers. 

PPO premiums are less than Fee-for-service premiums because the plan saves money by setting dollar limits in its contracts with health care providers.

Do whatever you can to keep your health insurance. If you have insurance through work, you can continue your insurance through COBRA and HIPAA. If you have individual insurance and are having difficulty paying the premiums, see How To Deal With A Financial Crunch.