What is a PPO plan?

With a Preferred Provider Organization (PPO) health plan, you pay less when using doctors and providers in the plan’s network. The plan lets you see doctors and providers outside of the network without a referral, but for an additional cost.

Danielle R.

Published December 23, 2020.

Similarly to an HMO, a Preferred Provider Organization (PPO) has a network of preferred doctors and providers that you can visit for your medical care, at a lower cost.

However, the key difference between a Health Maintenance Organization (HMO) and a PPO is that a PPO will allow you to use doctors outside of the plan’s network. This gives patients a lot of freedom to choose their own physicians, providers, clinics and hospitals.

Primary care physician and Specialist visits with a PPO

A PPO plan doesn’t require you to have a primary care physician (PCP). You can even see a specialist without a referral from your PCP. with a PPO, you can book an appointment directly with a neurologist or cardiologist without getting approval first.

This also means if you switch to a PPO plan and you already have a doctor you like, you can keep that doctor. This can be especially important for people with chronic conditions who prefer to have consistent care and interactions with the same team or people.

Medical care claims

Another key difference between PPOs and HMOs is that because HMOs require you to use their provider network, you will very rarely have to make a claim. PPOs on the other hand will require you to make claims in certain cases.

Do your research on your particular PPO plan to understand the claim process and make a sound decision for you and your family.

Cost of a Preferred Provider Organization plan

Overall, PPOs give you more control over your healthcare options.

However, this greater flexibility comes with a price, overall higher prices to be exact. You can easily expect to pay more for a PPO than an HMO. Both monthly premiums and copays will be higher and you will have a deductible you must meet. But utilizing the in-network medical care providers will save you money overall. 

Is a PPO plan right for you?

If you are thinking about getting a PPO, consider your lifestyle and what you want from your health insurance provider. If you really value flexible options and personalized care, a PPO may be a good choice, but make sure to consider how much you are willing to pay for those options.

Another consideration is the availability of hospitals and doctors. If you live in a remote area or frequently travel, how easy would it be for you to find an in-network doctor? If the answer is not very easy or extremely difficult, a PPO does not penalize you for going outside of network and provides valid options for your lifestyle. You can usually buy a PPO health plan through your employer or on a marketplace.  

Different types of health insurance plans

HMO (Health Maintenance Organization) is the most common alternative to PPO. HMO plans offer a network of health and medical care providers, but generally limit coverage to care received frrom in-network providers. In addition, an HMO requires you to choose a Primary Care Physician (PCP) and get a referral before seeing a specialist.

An EPO, Exclusive Provider Organization, is like a hybrid between an HMO and PPO. EPOs are managed care plans that offer coverage for medical care only if provided by an in-network doctor or facility. Out-of-network medical care is not covered, only in an emergency. Yet you will not be required to get a referral to see a specialist.

Should you still have more questions about PPOs or are ready to start the application process, contact an agent that you trust for with your healthcare.