Personal Finance Tips

In case you are looking for a comprehensive type of health coverage with much room for flexibility that still has a reasonable price-tag, a PPO insurance plan may be just the thing you need to cover your health needs.

Preferred Provider Organizations represent a network of medical workers, facilities and other professionals that are contracted by the insurance company in order to get more competitive fees for their customers. So those who are getting their medical services within the specified network will be charged with lower rates than if looking for them outside. However, you can still receive medical coverage outside the network too, only that your rates will be higher compared to what you get within the network.

PPOs can be regarded as a mix of traditional indemnity health plans and later-developed managed care options. In what concerns the network organization of medical services, PPOs are quite similar to HMO insurance plans. However, when you get a PPO plan, you aren’t required to choose a primary care provider (PCP). It’s the main difference between these two quite similar health insurance plan types. And since there aren’t any PCPs in PPO plans, you aren’t required to provide a referral when addressing any given specialist within the network. And when you receive your medical care in a facility or with a specialist outside the specified network your copayments will be considerably higher, but you still will receive partial coverage.

The advantages of PPO plans:

• PPO plans help keeping out of pocket costs within certain annual limits.
• PPO plans let you consult with any medical service provider even if he or she doesn’t make part of your network.
• PPO plans offer substantial money saving potential when receiving healthcare services within the specified network of doctors and facilities.

The disadvantages of PPO plans:

• PPO plans require you to pay the deductible before receiving any coverage.
• PPO plans make services you get outside the specified network a lot more expensive.
• PPO plans have higher copayment rates if compared to other managed plan types.

Flexibility has its price

As my may guess, when a plan provides more flexibility and options it will usually cost more than a cheap health insurance plan with greater restrictions. That’s why PPOs are generally more expensive than HMOs.

Even in case you choose a lower amount of coverage with your PPO plan, there are additional fees and payments that will make your plan more expensive. So don’t base your estimations on the amount of coverage alone.

For instance, besides the usual premiums you have to pay every month, there are also additional coinsurance fees, except for the cases when you use a preventive healthcare service. There is also a deductible to be paid before you can receive any benefits from your PPO plan.

How to get a good plan?

Sometimes it may be quite hard to get a good PPO plan that would provide increased flexibility for a reasonable price. If you feel that a PPO plan is just the thing you need to cover your medical costs, you first would want to get health insurance quotes from numerous providers or talk to your insurance agent about the options you have. Shopping around doesn’t take much time but as a result you can expect substantial savings if you manage to select the right provider.

Health insurance spendings account for a large part of business activity costs, and their share is especially large with small businesses and home-based enterprises. And with the continuous trends in rates increase it’s getting harder and harder for small enterprises to carry this burden, causing many small businesses to drop health coverage benefits altogether.

A recent study conducted by the Commonwealth Fund in New York has concluded that small businesses tend to pay 18% more for health insurance than their larger counterparts all across the country. That’s because large enterprises have a better negotiating power due to larger numbers of workers to be insured. Having that in mind, being despaired about the thing won’t help your small business much. About 60% of 46 million people in the US who have no health insurance coverage are employed by small enterprises and these numbers keep on growing. Such tendencies are no good news for small businesses, because qualified and better workers tend to pay much attention to health benefits at the enterprise and not having them lowers your chance of attracting workers who will help develop your business better.

In order to cope with the Catch 22 situation here, you have to learn how to minimize your healthcare costs and provide your employees with the benefits they deserve. Here are some tips on how to get exactly what you need:

1. Keep the workers healthy. Instead of fighting the consequences and paying for costly medical coverage, you can invest into your workers’ health and promote different wellness programs at your business. Introduce regular screenings, check-ups and promote a healthy lifestyle by offering your employees free gym sessions or other benefits. It’s much easier to prevent a disease rather than treat it.

2. Lower the coverage. Larger coverage amounts lead to higher premiums and a logical solution for this would be lowering the coverage. You can also ask your employees to partially contribute to the premiums if they want to keep the initial coverage amounts. Of course, this would be quite unpopular among your employees but if your small business insurance plan is in question you have to consider going with such unpopular measures.

3. Think about HSAs. Health savings accounts are gaining popularity amongst small business owners as they provide more flexibility and tax benefits than typical health insurance options. HSAs combine high-deductible health insurance plans with tax-free savings accounts, making the premiums you have to pay lower, and providing more saving options to your employees. And the fact that all withdrawals are tax-free makes it a great option for those who want to get great small business insurance health coverage without constraining the enterprise’s budget.

4. Team up with other small businesses. You can join an association or buying union who other local small businesses in order to gain better rates. Such associations provide small enterprises the bargain power of big companies because when combined, such groups have a large number of employees to be insured which eventually leads to more competitive premiums compared to going off alone. Member fees are usually quite low with such groups while the benefits are great, so think about joining one of you have in your area. This might give you good rates on other forms of small business insurance as well.