Preferred Provider Organization (PPO) plans are a type of Medicare Advantage (Part C) plan just like an HMO, or Health Maintenance Organization, a PPO plan offers a network of healthcare providers you can use for your medical care at a reduced cost from the Original Medicare. It is one of 4 Advantage plan options (the others being SNP, HMO, and PFFS plans).

Medicare Advantage plans generally must cover hospital and medical insurance that are normally covered under Original Medicare (Part A and  Part B). You must be enrolled in both Medicare Part A and Part B before you are eligible for a PPO plan.

This, however, is the only eligibility requirement. PPO plans are flexible, inexpensive, and a great option for many Medicare beneficiaries especially if you are looking for a flexible plan.

PPO Plans Do

PPO plans cover the out-of-pocket costs of Original Medicare. This typically includes the copayment/coinsurance fees involved in regular maintenance and healthcare, such as doctor’s visits.

Cost coverage is reliant on a network of healthcare providers. Any care received within this network will be at little to no cost to you—anything outside of the network will, then, cost more.

A network is a collection of doctors, offices, etc. that your insurance provider has established. PPO plans offer a wide range of coverage. Specific offerings, however, will vary depending on the insurance company and your location.

Unlike a Health Maintenance Organization (HMO), a Preferred Provider Organization allows you to have the freedom to receive care from any health care provider—in or out of your network.

In other words, a PPO plan gives you the opportunity to see any doctor or specialist, or use any hospital.

Nevertheless, it is advisable to stay within your plan’s network to avoid additional costs but if you don’t mind paying a larger out-of-pocket amount, this shouldn’t be a big concern.


Because of this vast network, PPO plans are very flexible. They offer:

  • More Doctors in More Locations
  • No Required Primary Care Doctors
  • No Required Specialist Referral


With other Advantage plans, you may be required to visit one primary care physician before seeking any other treatment or specialist. With a PPO plan, you can visit anyone you like, with costs covered within the aforementioned network.

In terms of additional benefits, like almost every Advantage plan, most PPO plans will provide prescription drug coverage. Ask the plan to make sure. The only way to get your Medicare drug coverage is to join a PPO Plan that includes prescription drug coverage.

It is important to mention that, in case you decide to enroll in a PPO Plan that doesn’t offer prescription drug coverage, you will not be able to join a separate drug plan. Preferred Provider Organization plans also offer limited dental, vision, and hearing services.

However, keep in mind that these benefits are very limited. Typically, plans only include regular checkups in these areas, not specific treatment or equipment.


The basic Preferred Provider Organization (PPO) Plan provides in and out-of-network coverage and the overall costs are less if participants use providers in the plan’s network.

However, individuals can access out-of-network providers without a referral but for an additional cost. All Medicare Advantage plans include deductibles, copayments, or coinsurance for services received and most Part C beneficiaries have $0 monthly premiums.

However, just like every Medicare Advantage plan, PPO plans have an out-of-pocket limit maximum they can spend on services. When beneficiaries reach this limit, their insurance provider is obliged to cover all possible costs for the rest of the year.


Even though a Preferred Provider Organization health insurance plan provides more choices and is more flexible than an HMO plan, when it comes to the health care services you may receive, out-of-pocket costs that are associated with PPO plans will be higher.

Also, the monthly premiums as well as your copays for office visits will be more expensive, and there is also an annual deductible that must be met.

This is why, with these kinds of plans, it is advisable to use in-network providers, doctors, and other healthcare professionals as much as you can as staying in your PPO network will help you reduce costs and save money.


Compared to Preferred Provider Organization (PPO) plans, Health Maintenance Organization (HMO) plans usually cost less. This means that HMO plans have lower monthly premiums and individuals who choose to enroll in an HMO plan can expect to have less out-of-pocket costs.

PPO plans tend to have a higher monthly premium and possible out-of-pocket costs but imply a certain amount of flexibility to use providers both in and out of the network without a referral, which isn’t the case with HMO plans. Out-of-pocket medical costs can also run higher with a PPO plan.

Also, with an HMO plan, you need to go through a primary care physician first for any potential healthcare services you might need while with PPO plans this is not a necessary course of action you would need to take. 

Finding a plan that is right for you is no easy task but the main key to finding it is to look for a balance between the specific coverage you want and the monthly premium adequate to your budget.

Ultimately, it comes down to what you individually find most important and valuable in taking care of yourself and your healthcare needs.

If you are someone who travels a lot and would feel more relaxed with a sense of flexibility concerning receiving healthcare services then a PPO plan would probably be a better fit for you.

This is mainly because, as we previously mentioned, Preferred Provider Organization plans would don’t require a primary care physician.

Make sure you take a detailed look at both plans before making a decision and look into PPO plans especially if you would like to have more control over your choices and have the resources to pay more for that ability. 

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More than likely, then, you will be choosing between an HMO or a PPO plan. HMOs are less expensive than PPOs. They do, however, offer a significantly smaller and much less flexible network.

HMO plans require a primary care physician, specialist referral, and offer an overall smaller network range of coverage than PPOs. If you are more concerned with finances, an HMO may be a better choice for you. On the other hand, if you need flexibility, a PPO will likely serve you better.

Is a PPO Plan
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