Is PPO Insurance Right for You?

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PPO in health insurance stands for preferred provider organization and is a healthcare insurance plan that allows members to seek medical care from doctors, hospitals and other healthcare facilities outside of their plan’s network. This type of plan might be the right fit for those valuing autonomy in healthcare choices, even if it means paying a higher premium for that flexibility.

Learn about the benefits of having a PPO plan and how it compares to other healthcare insurance types.

Key Takeaways

  • PPO insurance is a healthcare plan that offers coverage for in-network and out-of-network care.
  • 49% of covered workers are enrolled in a PPO plan.
  • Primary care physicians are not required nor is a referral to see a specialist.
  • PPOs are generally the most expensive type of healthcare plan.
  • The cost of a PPO will depend on your age, deductible, health history, dependants, state of residence and metal tier.

What is PPO Insurance?

A PPO (preferred provider organization) is a healthcare insurance plan that provides a high level of flexibility not offered by other types of health insurance plans. For example, PPO plans allow individuals and families to seek medical care from doctors, hospitals and other healthcare facilities outside of their plan’s network. The desirability of these plans is so high, that as of 2022, 49% of group healthcare plans were PPOs.[1]

How Does PPO Insurance Work?

PPO plans have a network of providers that are contracted with your health insurance, allowing you to seek services for minimal cost depending on your copay and deductible. To find doctors and specialists within your PPO network, begin by checking your insurance provider's website or member portal. Many insurers will also feature an online directory, allowing you to filter by specialty and location.

PPO plans can still cover you when you seek medical care outside of your plan’s network but your out-of-pocket costs will be higher.

Generally, you can do this by submitting the claim to your insurance company through a mobile app, online portal or over the phone. Once your insurance company reviews it, they will reimburse some of the cost. While this is an added step, receiving at least some coverage for out-of-network care provides PPO members with the flexibility to get coverage anywhere and by anyone.

PPO Rules for Subscribers

Those who have a PPO health plan enjoy wider access to medical care with fewer restrictions in exchange for a higher premium. PPO subscribers can receive medical care from out-of-network providers at the cost of higher out-of-pocket expenses than they would face with an in-network provider. Additionally, PPO subscribers are not required to have a primary care physician, allowing you to see a specialist without having to obtain a referral.

Besides higher premiums, PPO subscribers can also expect higher copayments for each provider visit and must meet specific deductibles before the plan fully covers services. Remember, you’ll still have to pay coinsurance after you’ve met your plan’s deductible.

Primary Care Physician (PCP)

PCPs are not required when you have a PPO, which also means you won’t need a referral when seeking care from a specialist. Keep in mind that having a PCP may still be worth having as you will have someone who, over time, comes to understand your medical needs and history and can act as a quarterback when it comes to coordinating your care.

What Does PPO Insurance Cover?

PPO insurance provides coverage for a range of healthcare services including preventive care, hospital stays, surgeries and prescription medications. Members have the flexibility to choose any healthcare provider but receive optimal benefits when using in-network providers. Out-of-network services are typically covered but at a reduced benefit level. Specific services and coverage limits vary based on individual plan details.

What Isn’t Covered?

While coverage details vary by individual PPO plans, common exclusions or limitations in PPO insurance might include:

  • Aesthetic procedures without a medical justification
  • Therapies considered experimental or not in line with standard practice by the PPO
  • Specific prescription medications not listed in the plan's formulary
  • Over-the-counter drugs and equipment, unless explicitly mentioned in the plan
  • Services not recognized as essential based on the PPO's standards

How Can I Get the Most Out of My PPO?

Using in-network providers can help maximize your PPO by significantly reducing your out-of-pocket expenses. Moreover, by taking advantage of the preventive services offered by your PPO — like routine check-ups and screenings — you can detect potential health concerns early and potentially prevent more serious issues in the future.

It's also wise to be aware of any coverage restrictions or exclusions to plan for your healthcare expenses effectively. If your plan permits, explore health savings accounts (HSAs) to set aside pre-tax dollars for eligible medical costs, providing both financial and tax advantages.

Your prescription drug coverage is another vital area to understand. Ensure your medications are included in the formulary and consider using mail-order services for added savings. Stay updated with any changes to your PPO, be it in copayments or provider networks, so you're consistently making well-informed healthcare decisions.

In addition, if you’re seeking quality doctors and specialists, consider tapping into personal networks, like friends or colleagues with the same insurance, can be beneficial. Their firsthand experiences can lead you to trusted in-network doctors and specialists.

How Much Does PPO Insurance Cost?

The overall cost of a PPO plan is going to be higher than other healthcare options due to the ability to get coverage for providers outside of your policy’s network and to see a specialist without needing a referral. The individual price for a PPO will depend on your age, deductible, health history, dependants, state of residence and metal tier. These tiers in particular have five levels: bronze, silver, gold, platinum and catastrophic.

While bronze plans offer lower monthly premiums, they come with higher out-of-pocket expenses. Conversely, platinum plans have higher monthly premiums but significantly reduced out-of-pocket costs. It's important to note that these tiers don't indicate the quality of care.

What’s the Difference Between PPO, HMO, EPO and POS?

A PPO health plan is one of several coverage options available by health insurance companies. Each coverage type dictates how coverage works with in- and out-of-network providers, if you need a PCP or if a referral is required for a specialist. Below, we compare PPOs to HMOs (health maintenance organization), EPOs (exclusive provider organization) and POS’ (point of service).

health insurance cost and coverage by types table illustrations






Primary Care Physician Required?





Referral Required for Specialists





Out-of-network Coverage?





Network Size






Highest cost

Lowest cost

Lower cost

Higher cost


Preferred provider organization plans do not require members to have a primary care physician while HMOs do. Also, preferred provider organizations allow members to get care from out-of-network providers, while HMOs will only cover out-of-network care only in emergency situations. PPO networks are also often larger than HMO networks.

Due to the size and flexibility of coverage, PPOs cost more than HMOs.


EPOs function in a similar fashion to HMOs in terms of not providing any coverage for out-of-network care outside emergencies. However, neither EPOs nor PPO plans require policyholders to obtain a referral before they can see a specialist. You are also not required to have a PCP for either plan.


PPO and POS plans both allow policyholders to seek treatment out-of-network at a higher out-of-pocket cost. While PPO health plans don't require you to get a referral before seeing a specialist, this requirement will apply to a POS plan, necessitating the use of a PCP.

How Do I Enroll in a PPO Insurance Plan?

When exploring insurance options, it's wise to collect quotes from multiple healthcare providers — ideally between three to five. Your premiums are determined by aspects such as your location, age, smoking habits, selected plan and any dependents you include. Going through each company's process can feel daunting.

Fortunately, platforms like SmartFinancial make it effortless. Fill out a single form with your health background and earnings and receive a customized health insurance policy in no time. Kickstart your search by inputting your zip code for a complimentary quote.

Get Your Free Health Insurance Quote Today!


How does a PPO deductible work?

A health insurance deductible is the amount of money you pay before your health insurance kicks in. If you have a $2,000 deductible, you will pay up to that $2,000 for a covered service and then your health insurance company will start covering the remaining costs.

Why are PPO insurance plans more expensive?

PPO plans are more expensive because they often carry larger provider networks, don’t require members to obtain a referral before seeing a specialist and provide some coverage for out-of-network care.

What is the advantage of having a PPO insurance plan?

Benefits of a PPO health plan include some coverage when receiving medical care from a provider who is out-of-network, not needing a primary care physician and you aren’t required to have a referral to see a specialist. PPO provider networks also tend to be larger than the other insurance types.

What is PPO in health insurance?

PPO stands for "preferred provider organization," a type of health insurance plan that allows members to see any doctor or specialist they want without a referral. However, members pay less out-of-pocket when using providers within the plan's network.


  1. Kaiser Family Foundation. “2022 Employer Health Benefits Survey.” Accessed October 6, 2023.

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