What is a PPO health plan?

While shopping for health insurance, you may have heard of a PPO plan. A PPO plan is a common type of health insurance that partners with a group of clinics, hospitals and doctors to create a network of preferred providers. With PPO insurance, you’ll pay less out of pocket when you get care within that network. You can still see an out-of-network provider, but you’ll get the most coverage when you stay within the PPO network. PPO health plans may be a good fit for someone who lives in 2 different states or travels often within the U.S.

What does PPO stand for?

PPO, meaning “preferred provider organization,” refers to its network of contracted PPO providers. Think of the plan’s preferred providers as those who can offer care at the lowest out-of-pocket cost (compared to out-of-network providers).

How does a PPO work?

A PPO plan works like many other health insurance plans. The plan pays its contracted providers a set cost to offer certain health care services, which is why you’re able to pay a lower cost-share (like a copay or coinsurance) when you get care within that network. If you get care outside that network, you’ll pay more and likely have to submit an insurance claim. Plus, you’ll have to meet an out-of-network deductible before your plan benefits kick in. This is separate from your deductible for network care. Some PPO plans have a large network and some have small (narrow) networks. Be sure to pick a plan with a provider network that fits your needs.

What’s the advantage of a PPO plan?

In general, you get more flexibility with a PPO plan than some other plan types. That may be why someone chooses this type of plan. PPO plans come with many pros, including:

  • Can have a large, nationwide provider network
  • No referrals needed
  • Out-of-network coverage
  • No requirement to choose a primary care provider

What’s the difference between an HMO and a PPO?

An HMO (health maintenance organization) plan is another common type of health plan. HMO plans only cover services you get from a network provider, except for emergency care. That means if you see an out-of-network provider, you’ll likely have to pay the full cost of your visit. Typically, HMO plans have lower premiums than PPO plans. It’s important to understand the differences between HMO and PPO plans when deciding which to buy.

HMO vs. PPO plans

Do I need referrals? Yes No
Is there coverage for out-of-network care? No Yes
Am I required to choose a primary care provider? Yes No

Do I need a referral with a PPO plan?

One advantage of a PPO plan is that you don’t need a referral to see specialists. You have the flexibility and coverage to see any provider you’d like to get care.

What’s a Medicare PPO plan?

If you’re 65 or older, you may be interested in a Medicare PPO plan, called a Medicare Advantage plan. These work just like an Affordable Care Act Marketplace PPO plan. You’re still able to get care from out-of-network providers, but only if they accept Medicare.

What’s a PPO dental plan?

PPO dental insurance is similar to a PPO health plan. A dental PPO plan has a list of preferred dental providers you can see at a lower cost. You have the freedom to see any provider you’d like, but you’ll pay more out of pocket if you visit an out-of-network dental provider.

Looking for dental coverage on Medicare? Medicare Advantage plans come with more dental benefits than you would normally get with Medicare parts A and B alone. PPO Medicare plans can include coverage for things like:

  • Routine cleanings
  • Fluoride
  • Filings and crowns
  • Root canals
  • Extractions
  • Dentures

Keep in mind PPO plans are just one type of health insurance plan available for individuals and families. The other three basic kinds of networks and health plans include HMO, EPO and POS health plans. Do your research to understand the pros and cons of each so you can choose the best fit for your needs.