Preferred Provider Organization (PPO)

A preferred provider organization (PPO) is a managed care organization of doctors, hospitals, and other providers who have contracted with a health insurance company to provide health care at reduced rates to the health insurance companies members.

The idea of a PPO is that the providers will provide the insured members of the group a substantial discount below their regularly-charged rates. This will be mutually beneficial in theory, as the insurer will be billed at a reduced rate when its members use the services of the "preferred" provider and the provider will see an increase in its business as almost all members in the organization will use only providers who are part of the network.  Members should benefit as well, as lower costs to the insurer should result in lower health insurance rates.

There are many great PPOs available for individuals and families, and If you feel a PPO health plan is right for you you should compare offerings side-by-side (including the benefits, monthly premiums and exclusions among other factors) before making your ultimate purchase decision