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What is PPO Insurance?

A Preferred Provider Organization (PPO) is a type of health care plan that has a network of participating providers.

Christian Worstell

by Christian Worstell | Published November 17, 2023 | Reviewed by John Krahnert

A Preferred Provider Organization (PPO) plan is a type of health insurance that offers its members more flexibility in choosing healthcare providers.

A PPO differs from other plans, such as Health Maintenance Organizations (HMOs), by not requiring members to have a primary care physician or obtain referrals for specialist visits. This allows you to visit any provider within the network without needing prior authorization.

Medicare Supplement (Medigap) insurance plans don't have network requirements and are accepted by any doctor or provider who accepts Medicare, unlike certain Medicare PPO insurance plans.

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Benefits of PPO Insurance

One of the main advantages of a PPO insurance plan is the flexibility it offers to its members.

Unlike other types of health plans, PPOs don't necessitate getting referrals when seeing in-network care providers. This means that you can directly make appointments with specialists without having to first consult a primary care provider.

  • No Referrals Required: With a PPO plan, you have the freedom to visit any provider within your network without needing a referral from your primary care doctor. This saves time and allows for quicker access to specialized medical services if needed. 

  • Coverage for Out-of-Network Care: While seeing an in-network provider will typically result in lower costs, PPO health plans also offer coverage for out-of-network care - though at higher rates than in-network visits. This feature provides additional options when seeking medical treatment or consultations.

  • Larger Provider Network: Many people prefer PPO insurance because these plans often come with larger networks compared to other types of health insurance like HMOs or EPOs. A larger network increases the chances that your preferred providers are included in the plan.

With a PPO plan, the insurance company pays a portion of the medical claims, while the employees cover the remaining out-of-pocket costs.

PPO plans are offered by many health insurance companies and are a popular type of health insurance plan among medical professionals.

Disadvantages of PPO Insurance

While PPO insurance offers numerous benefits, it also comes with certain drawbacks that you should consider before choosing this type of plan. Some disadvantages include increased costs and decreased coverage for out-of-network care.

Higher Costs

The freedom to visit any provider within the network without needing a referral often results in higher premiums, deductibles, and copayments compared to other health insurance plans. This can make PPO plans less affordable for some individuals, especially those on a fixed income or tight budget.

Decreased Coverage for Out-of-Network Care

In addition to higher costs associated with in-network care, PPO beneficiaries may face decreased coverage when visiting providers outside their network.

While these visits are still covered under the plan, they typically come at a significantly higher cost than seeing an in-network provider.

This means that if you frequently require specialty physicians not included in your health plan's network or prefer seeking treatment from medical providers outside the network, you might end up paying more out-of-pocket expenses.

Limited Availability in Certain Areas

In some regions or rural areas where there is limited access to healthcare providers participating in PPO networks, availability of such plans may be restricted.

Consequently, elderly residents living far away from urban centers might find it challenging to locate nearby medical professionals who accept their chosen insurance policy.

PPO vs. HMO Insurance 

In addition to allowing more flexibility when selecting care providers, PPO health insurance also covers out-of-network treatment, though typically at a higher cost than in-network services.

The main advantage of this feature is that you can still receive coverage if your preferred doctor or specialist isn't part of the plan's network.

  • No Primary Care Physician Requirement: With a PPO plan, there's no need to designate a primary care physician who would be responsible for coordinating all your healthcare needs and providing referrals.

  • Fewer Referrals Needed: Members are free to visit specialists within their network without obtaining referrals from their primary care doctors first.

  • Coverage for Out-of-Network Providers: While it may be more expensive, PPO plans offer some level of coverage when visiting medical providers outside the designated network.


What are 3 disadvantages of a PPO?

Potential drawbacks of a PPO health plan include higher premiums, out-of-pocket costs for out-of-network care, and the possibility of balance billing from providers not contracted with the insurer. These factors can lead to increased healthcare expenses for some individuals.

What are 2 advantages of choosing the PPO?

The main benefits of a PPO insurance plan are flexibility in provider choice and no requirement for referrals. This allows members to see specialists without needing approval from their primary care physician, providing more control over their healthcare decisions.

What does PPO mean in insurance coverage?

PPO stands for Preferred Provider Organization. It is an insurance model that offers members access to a network of preferred healthcare providers at negotiated rates while still allowing them to seek treatment outside this network, albeit at potentially higher costs.

What is the goal of PPO insurance?

The goal of PPO insurance is to provide policyholders with greater flexibility and autonomy when it comes to selecting healthcare providers while maintaining cost-effective options through negotiated rates within its preferred provider network.


PPO insurance is a type of health insurance plan that offers flexibility and choice to the elderly. It allows them to choose their healthcare providers, including specialists, without requiring referrals from primary care physicians. PPO plans also offer coverage for out-of-network services, although at higher costs.

PPO insurance can offer advantages, like more freedom in selecting healthcare providers; however, it also entails greater premiums and deductibles than other types of health coverage. Ultimately, whether or not PPO insurance is right for an individual depends on their specific healthcare needs and budget.

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