Medicare preferred provider organizations (PPO) are one type of Medicare Advantage (Medicare Part C) plan. These plans have a list of in-network providers that cost less than out-of-network providers.
When you enroll in a Medicare Advantage plan, you have a variety of different plan structures to choose from. Medicare Advantage PPOs are plans that offer provider flexibility for beneficiaries who need it.
With Medicare Advantage PPOs, you’ll receive coverage for any provider you’d like, but you’ll pay less if you use in-network providers and more if you use out-of-network providers.
In this article, we’ll explore Medicare Advantage PPOs, including what they cover, how they compare to HMOs, and the advantages and disadvantages of enrolling in a Medicare Advantage PPO plan.
Medicare Advantage plans are sold by private insurance companies. All Medicare Advantage plans cover Medicare Part A and Medicare Part B, and many also cover prescription drugs and other additional healthcare needs.
When you enroll in Medicare Advantage, you’ll need to choose a type of plan structure that matches your needs, such as:
Anyone enrolled in Original Medicare parts A and B is eligible to enroll in a Medicare Advantage PPO plan in their state.
How do Medicare Advantage PPOs work?
Medicare Advantage PPOs offer provider flexibility for people who want coverage for services from both in-network and out-of-network providers.
With a Medicare Advantage PPO, you can visit any provider you’d like. However, the amount that you pay will differ based on whether that provider is in-network or out-of-network.
If you visit an in-network provider for your services, you will pay less than if you visit an out-of-network provider for those same services.
When you enroll in a Medicare Advantage PPO plan, you’ll be covered for:
- Medicare Part A: Part A coverage includes hospital services, limited skilled nursing facility care, limited home healthcare, and hospice care.
- Medicare Part B: Part B coverage includes medical insurance for the diagnosis, prevention, and treatment of health conditions
- Prescription drug coverage: Prescription coverage is offered by most Medicare Advantage PPO plans and Medicare Part D.
- Other healthcare services: Some PPO plans include healthcare services like dental, vision, and hearing visits.
- Additional health perks: Some PPO plans offer other benefits, such as fitness memberships and transportation to medical appointments.
Generally, Medicare Advantage PPO plans will be more costly the more you use out-of-network providers for your services. However, there are some baseline costs in almost all Medicare Advantage plans.
Premiums
When you enroll in a Medicare Advantage plan, you will be responsible for the Part B premium unless your plan covers it. In addition, Medicare Advantage PPO plans can charge monthly premiums, although some “free” plans don’t charge a plan premium at all.
Deductibles
Medicare Advantage PPO plans can charge a deductible amount for both the plan and the prescription drug portion of the plan. Sometimes, this amount is $0, but it depends entirely on the plan you choose.
Copayments and coinsurance
With a PPO plan, copayment amounts can differ depending on whether you visit a doctor or specialist who is in-network or out-of-network. Common copayment amounts range from $0 to $50 and up.
Medicare Part B charges a 20% coinsurance that you will pay out-of-pocket after your deductible has been met. This amount can add up quickly with a Medicare Advantage PPO plan if you are using out-of-network providers.
Out-of-pocket maximum
All Medicare Advantage plans have an out-of-pocket maximum amount that you will pay before they cover 100% of your services. With a Medicare Advantage PPO plan, you will have both an in-network max and an out-of-network max.
Below is a comparison chart showing what your costs may be if you enroll in a Medicare Advantage PPO plan in a major U.S. city.
| Plan name | Location | Monthly premium | In-network deductible | Drug deductible | Copays & coinsurance | Out-of-Pocket Max | Plan Name |
|---|---|---|---|---|---|---|---|
| HumanaChoice H5216-157 (PPO) | Atlanta, GA | $0 | $0 | $0 | PCP: $5/visit specialist: $45/visit | $9,550 In and Out-of-network $6,100 In-network | HumanaChoice H5216-157 (PPO) |
| Aetna Medicare Premier Plus 1 (PPO) | Denver, CO | $0 | $0 | $0 | PCP: $0/visit specialist: $35/visit | $8,950 In and Out-of-network $5,200 In-network | Aetna Medicare Prime 1 (PPO) |
| HAP Medicare Explore (PPO) | Detroit, MI | $0 | $0 | $0 | PCP: $0/visit specialist: $45/visit | $5,200 In and Out-of-network | HAP Medicare Explore (PPO) |
| Cigna True Choice Savings Medicare (PPO) | Hartford, CT | $0 | $0 | $0 | PCP: $0/visit specialist: $45/visit | $5,200 In and Out-of-network | Cigna True Choice Savings Medicare (PPO) |
| Blue KC Essential (PPO) | Kansas City, MO | $0 | $0 | $0 | PCP: $0/visit specialist: $40/visit | $10,700 In and Out-of-network $7,250 In-network | Blue KC Essential (PPO) |
| AARP Medicare Advantage from UHC OR-0002 (PPO) | Portland, OR | $0 | $0 | $0 | PCP: $0/visit specialist: $0-$45/visit | $9,550 In and Out-of-network $5,600 In-network | AARP Medicare Advantage from UHC OR-0002 (PPO)) |
Before you enroll in a Medicare Advantage PPO plan, consider the following advantages and disadvantages and how they can affect your quality of care.
Advantages of Medicare Advantage PPOs
- PPO plans are a great choice for people who want to keep flexibility in the providers they visit, especially those who want to keep their current doctor.
- In addition, if you need services from a specialist, a referral is not required – and you can even save money by using in-network specialists.
Disadvantages of Medicare Advantage PPOs
- Medicare Advantage PPOs aren’t as widely available as HMOs, which means fewer plan offerings for beneficiaries. For people who use out-of-network services often, this can cause healthcare costs to add up quickly.
- Most PPO plans also have multiple out-of-pocket maximum amounts. These additional fees can cause healthcare costs to add up quickly.
Research has also suggested that PPO plans don’t offer as many new benefits as HMO plans over time.
How do Medicare Advantage PPOs compare to Original Medicare?
It’s important to consider all your healthcare needs when choosing between a Medicare Advantage plan or Original Medicare. When you compare the two plans, you’ll want to consider some of the differences below.
| Part A | Part B | Part D (prescription drugs) | Medigap (supplemental) | Additional coverage | Out-of-state care | Costs | Out-of-pocket max | ||
|---|---|---|---|---|---|---|---|---|---|
| Medicare Advantage PPOs | yes | yes | most times | no | yes | yes | original costs + plan costs | yes | Medicare Advantage PPOs |
| Original Medicare | yes | yes | add-on | add-on | no | yes | original costs | no | Original Medicare |
After you’ve decided which type of Medicare plan will best suit your needs, you can begin to compare plan costs and find a plan that will save you the most money.
If you’re currently shopping around for Medicare Advantage plans, you may have some questions about how Medicare Advantage PPOs work.
Below, you will find some of the most commonly asked questions about Medicare Advantage PPO plans.
What is the difference between PPO and HMO plans?
Medicare Advantage PPOs are different from Medicare HMOs because they allow beneficiaries the opportunity to seek services from out-of-network providers.
When you visit out-of-network providers with a PPO plan, you are covered but will pay more for the services. When you use out-of-network providers with an HMO plan, you are generally not covered and will pay the full cost for those services.
Can I keep my doctor?
You can continue to visit your doctor with your PPO plan, as Medicare Advantage PPOs don’t require that you choose a specific primary care provider (PCP). However, if your doctor is out-of-network, you will pay more for their services.
Do I need a referral to see a specialist?
Unlike Medicare HMOs, Medicare Advantage PPOs don’t require a referral for specialist visits. In fact, if you seek services from a specialist in your plan’s network, you will save more money than if you visit a specialist out of the network.
Medicare Advantage PPO plans are a popular Medicare option for enrollees who want more provider freedom than an HMO plan offers.
PPO plans offer cost savings when using in-network providers, but these costs can quickly add up when out-of-network providers are used. Still, a PCP is not required, and specialists do not require referrals, which is beneficial for those who require flexibility.
Comparing multiple plan offerings in your area can help you choose the best Medicare Advantage PPO plan for your needs.