A Preferred Provider Organization (PPO) health plan offers benefit rates that are dependent on the provider the member chooses. If you compare PPOs with Health Maintenance Organizations (HMOs), you'll see that a member receives higher benefit rates with the preferred provider option as long as the provider is within the PPO network. Usually, the member pays a co-pay at the time of service, plus a yearly deductible, prior to paying any percentage of incurred medical expenses.

The member of a PPO plan is usually responsible for 20% of medical fees for services rendered by network providers. PPO plans are also available for dentists and Medicare. Unless you are partial to a specific provider outside a particular network, a PPO health insurance plan may just be for you. When you compare PPO plans, remember to:

1. Review the provider network when you compare PPO plans.

2. Check the size of the deductible, if any, that must be paid before insurance kicks in.

3. Know the percentage distribution between the member and insurance company.

Action Steps
The best contacts and resources to help you get it done

Compare PPO plans for flexibility

As a member of a PPO, you are allowed to use an out-of-network provider without permission or a referral. In doing so, however, you may have to pay a higher fee. This is because in-network providers agree to offer better pricing because you are more likely to choose them if they are a part of your network. Additionally, the insurance company is likely to pay a smaller percentage of the medical fees.

I recommend: Go to 4 Free Quotes and USInsuranceOnline.com. They are both insurance brokers that assist you with shopping for PPO health plans.

Factor in the disadvantages of a PPO

PPO plans do have their disadvantages. Sometimes a member must decide whether to drop an existing provider. This can be difficult, especially if the provider is a trusted family doctor. This restrictive nature of the preferred provider option is the biggest negative.

I recommend: Try Vital One for an extensive guide on PPOs and how they compare with HMOs.

Consider dental PPOs and Medicare PPOs

In addition to regular PPO health plans, dentists and Medicare providers can also sign up to be part of an exclusive network to receive PPO status. In both cases, members are charged smaller copays simply for using the providers within the network. The benefits include quicker service, less hassle and affordable premiums.

I recommend: Check out the AARP's website for a list of Medicare rights. Delta Dental gives a thorough rundown of its Dental PPO plan.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Review the in-network providers when you compare PPOs. Plans may be limited, and you may be forced to use an out-of-network provider and pay higher costs.