What is a PPO Low vs PPO High?

When selecting a health insurance plan, one of the most important decisions is choosing between a low and high deductible PPO. This article provides an in-depth overview of PPO low vs PPO high to help you make the right choice.

What is a PPO Health Plan?

• PPO stands for Preferred Provider Organization. It is a type of health plan that contracts with medical providers.

• PPO members pay less when using in-network providers. Out-of-network care costs more but is still covered.

• Monthly premiums are higher than HMO plans but you have more flexibility in choosing doctors.

• There are two main types – low deductible and high deductible PPOs.

Key Differences Between PPO Low and High

There are several key differences between PPO low and PPO high:

• Premiums – PPO low has higher monthly premiums while PPO high has lower premiums.

• Deductibles – PPO low has a lower deductible amount that you pay out-of-pocket before insurance starts to pay. PPO high has a higher deductible.

• Out-of-pocket maximum – This is the limit on your total deductible and coinsurance costs for the year. PPO low has a lower out-of-pocket max while PPO high is higher.

• Copays – PPO low typically has copays for services. PPO high may not have copays. You pay coinsurance after reaching deductible.

• Tax savings – PPO high plans are eligible for health savings accounts (HSAs). PPO low plans do not qualify for HSAs.

PPO Low Deductible Overview

Here are some key things to know about low deductible PPO plans:

• Premiums are higher but deductibles are lower, usually around $500 to $1000 for individuals.

• You pay fixed copay amounts for services like $20 doctor visit copay or $10 generic prescription copay.

• Out-of-pocket maximums range from $2000 to $4000 on average. This limits your total expenses.

• No need to budget for an upfront deductible. Copays allow you to pay as you go for healthcare.

• Does not qualify for a health savings account (HSA).

• Suits those who use medical services frequently and want low out-of-pocket costs per visit.

PPO High Deductible Overview

Here are some key things to know about high deductible PPO plans:

• Premiums are lower but deductibles are higher, usually $1000+ for individuals and $2000+ for families.

• You pay the full negotiated rate for care until the deductible is met. No upfront copays.

• Out-of-pocket maximums range from $5000 to $7000+ on average.

• Qualifies for enrollment in a health savings account (HSA). HSAs offer triple tax savings.

• Suits healthy individuals who don’t expect frequent medical usage. Allows premium savings.

• Preventive care is fully covered by insurance, even before deductible.

PPO Low vs High Deductible Example

Here is an example comparing PPO low vs high deductible plans:

In this example, the PPO low has higher premiums but lower deductibles and out-of-pocket maximums compared to the PPO high. Copays allow paying fixed amounts upfront with the PPO low versus paying the full negotiated rate until the deductible is met with the PPO high.

Pros and Cons of PPO Low vs High

Who is PPO Low Better For?

A PPO low deductible plan generally works well for:

• Families with children who require frequent doctor’s visits
• Individuals taking maintenance prescription medications
• Those with chronic medical conditions needing regular treatment
• Seniors with more healthcare needs
• Risk-averse individuals wanting copays and low deductible
• Peace of mind from lower out-of-pocket maximums

Who is PPO High Better For?

A PPO high deductible plan generally works well for:

• Young healthy individuals with minimal healthcare needs
• Families who are active and fit
• Those wanting to open a health savings account (HSA)
• Individuals who won’t need expensive treatment
• Those with budget constraints who want lower premiums
• Self-employed needing a tax break from HSAs

How is Cost Sharing Different?

• PPO low – You pay copays for services up to out-of-pocket max. Copays don’t count towards deductible.

• PPO high – You pay full negotiated rate until deductible is met. Then you pay coinsurance until out-of-pocket max.

• Deductible and coinsurance costs go towards reaching out-of-pocket maximum.

• PPO high costs more upfront before deductible. PPO low spreads costs out through copays.

How Do You Choose Between PPO Low and High?

Choosing between PPO low and high deductible depends on factors like:

• Expected healthcare usage and needs
• Ability to pay higher upfront deductible if needed
• Savings on monthly premiums to offset higher deductible
• Ability to fund an HSA and benefit from triple tax advantages
• Income level and tax bracket (higher = more HSA benefits)
• Existing medical conditions and ongoing treatments
• Budget flexibility or constraints

Crunch the numbers for your situation, needs and finances. It’s a balancing act between monthly costs via premium and overall out-of-pocket limits.

Can You Have Both PPO Low and High?

Some employers may offer both PPO low and high deductible plans. Then you can choose what works best for your situation.

Others may only offer one type of plan. Some considerations if you can only choose low or high PPO:

• Pick PPO low if you have higher medical usage and want low deductible. Pay higher premiums.

• Pick PPO high if you are generally healthy and want to save premium costs. Fund HSA if budget allows.

• Supplement gaps in coverage with other products like dental insurance, accident insurance etc.

• Adjustable Compensation Plans allow opting out of group insurance to buy private plans.

• Get quotes for individual plans if employer’s plan doesn’t suit your needs.

Key Takeaways

• PPO low has higher premiums but lower deductibles and out-of-pocket maximums. PPO high is the opposite.

• PPO low has copays for services while PPO high requires paying the full negotiated rate until the deductible is met.

• PPO high plans qualify for enrollment in a health savings account (HSA).

• Evaluate your expected healthcare usage, budget, HSA goals and other factors to decide between PPO low vs high.

• If given both options, choose the plan that best fits your medical and financial needs.

• Be ready to make adjustments if your employer only offers one type of PPO plan.

Choosing the right level of deductible is crucial in getting the optimal balance of premium costs versus out-of-pocket costs. Carefully analyze your specific situation to decide whether a PPO low or PPO high deductible plan is the better choice.