A managed-care insurance plan that provides medical services to policyholders at discounted rates, allowing them to go either in or out of network and perform self-referrals for specialty care, as needed.
PPOs generally provide reimbursement at around 90 percent for in-network services and 60 to 70 percent for out-of-network care. Out-of-pocket expenses are usually capped at $1,200 per individual for in-network care, which means the insurance company may start paying sooner than with other types of managed care plans.
Though slightly more expensive than a POS or HMO plan, PPOs offer the insured more flexibility than other policy types. A preferred provider organization usually includes a more expansive network of doctors, hospitals and specialists, which gives you more choice when it comes to choosing a health care provider.
Some of the disadvantages of PPOs are larger copayments than you’d have with other types of managed-care plans and additional paperwork that’s often needed for reimbursement.