What is a PPO Plan? Health Insurance Explained

by Zencare team

You might not be sure why these letters appear so often in the world of health insurance. Maybe you have a hunch that they mean something significant (why else would they be everywhere?) but aren’t entirely sure why.  

Read on to learn more about these three letters and what it means for your access to mental health services.

What is a PPO?

“PPO” stands for Preferred Provider Organization. A PPO is a group of medical providers – think doctors, hospitals, specialists, therapists – that partner with an insurance company.

These providers offer their services to the insurance plan’s members and subsequently the insurance company reimburses them predetermined rates. Within this provider group, an individual can visit any of the providers without needing a referral – so there are plenty of options to choose from.

At its core, a PPO models a network of care. Insurance companies use this model to organize their payment systems. You might hear the term “Managed Care Organization,” which describes the healthcare delivery system of the PPO.

How do I know if I have a PPO plan?

First, check out the name of your insurance plan - this will likely show up on your insurance card. Often, the names of PPO plans have the letters “PPO” in the name - though there are many insurances that go by more catchy, simple names. If that is the case, see if you can locate your Summary and Benefits, the standardized masterlist of service coverage.

Your Summary and Benefits should have information about the plan near the top, detailing whether your plan is a PPO or another type of insurance. If you still cannot find the answer, give the customer service number on the back of your insurance card a call and ask if your plan is a PPO plan.

What are the benefits of a PPO plan?

There are many benefits to having a PPO plan! Here are a few reasons PPO plans might be a good choice for you:

  • They have a large, verified list of high-quality providers. Because these networks are vast and reach across the United States, you have many options to choose from when you’re looking for a provider.
  • No referrals required. This means that you can set up an appointment with any provider within the PPO network - which saves a lot of time and empowers you to be the one making decisions on your care team!
  • PPOs cover a wide range of services (including therapy!).
  • You pay less when you see a provider within your PPO network. Otherwise, you’re seeing an out-of-network provider, and the costs might be significantly higher.

What are the downsides of a PPO plan?

As with any insurance plan type, there are also downsides to having a PPO. Here are a few to keep in mind:

  • PPO plans generally have higher premiums (that is, the amount that you pay each month to have this insurance). Because of their accessibility, convenience, and freedom, it costs the insurance company more to maintain this type of plan.
  • If you want to see a provider that’s outside of the network, you might have to pay the full service fee yourself. This is a PPO plan’s way of incentivizing you to stay within their network.

Should I choose a PPO for my insurance plan?

It depends! PPO plans can be really great for individuals, but the details matter. To think about whether PPO plans are right for you, consider the following:

  • How much you want to pay for your premium. Factoring in how much your monthly cost will be, the deductible, and your overall budget, figure out if it’s feasible to choose a PPO plan.
  • If your current providers are within the PPO network. If you desire to stay with one of your providers but they’re out-of-network, you might end up with some hefty bills.
  • How many visits you expect to have within a given year. If you often see your providers, having lower per-visit costs may outweigh a higher premium.

Thinking through the pros and cons of this type of insurance is most effective when you have a Summary and Benefits and a provider directory to reference for each of your service types. For example, if you plan to see a therapist, you would want to see how much each session costs to you and whether or not the therapist for you is within the PPO network.

Zencare makes it easy for you to figure out who is within a PPO network – so you can focus on finding the right therapist!