• Medicare preferred provider organizations (PPO) is one type of Medicare Advantage (Medicare Part C) plan.
  • Medicare PPO plans have a list of in-network providers that you can visit and pay less.
  • If you choose a Medicare PPO and seek services from out-of-network providers, you’ll pay more.

When you enroll in a Medicare Advantage plan, there are a variety of different plan structures to choose from. Medicare Advantage PPOs are a type of Medicare Advantage plan that offer provider flexibility for beneficiaries who need it. With Medicare 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 all about Medicare PPOs, including what they cover, how they compare to HMOs, and the advantages and disadvantages of enrolling in a Medicare PPO plan.

Medicare Advantage plans are Medicare plans that are sold by private insurance companies who have been contracted to provide Medicare coverage. 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, like a PPO, HMO, PFFS, MSA, or SNP.

Medicare Advantage preferred provider organization plans, or Medicare PPOs, are a type of Advantage plan that offers more provider freedom at a higher cost. Each PPO plan has a list of in-network providers you can visit. If you seek services from these in-network providers, you’ll pay less. However, if you seek services from out-of-network providers, you’ll pay more.

When you enroll in a Medicare Advantage PPO plan, you’ll be covered for:

  • Medicare Part A, or hospital services, which includes nursing facility care, home health care, and hospice care
  • Medicare Part B, or medical insurance, which includes the diagnosis, prevention, and treatment of health conditions
  • Medicare Part D, or prescription drug coverage (offered by most Medicare PPO plans)
  • Dental, vision, and hearing visits (often included in your plan)
  • Additional health perks, such as fitness memberships and transportation

Anyone who is enrolled in original Medicare parts A and B is eligible to enroll in a Medicare PPO plan in the state they live in.

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 PPO plans.

How do Medicare PPOs work?

Medicare 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.

Are they different from HMOs?

Medicare 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 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 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.

Do they cover Rx drugs?

Most Medicare Advantage PPO plans cover prescription drugs, but this decision is up to each individual plan. Since Medicare does not allow you to enroll in Medicare Advantage and Medicare Part D at the same time, you’ll want to enroll in a Medicare PPO plan that includes prescription drugs if you need that coverage.

How do Medicare 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 APart BPart D (prescription drugs)Medigap (supplemental)Additional coverageOut-of-state careCostsOut-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.

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 that accompany 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. This premium starts at $144.60 per month and goes up based on income. In addition, Medicare PPO plans can charge their own monthly premium, although some “free” plans don’t charge a plan premium at all.

Deductibles

Medicare PPO plans can charge a deductible amount for both the plan, as well as the prescription drug portion of the plan. Sometimes this amount is $0, but it depends entirely on the plan you choose.

Copayments

With a PPO plan, copayment amounts can differ based on whether you visit a doctor or specialist that is in-network or out-of-network. Common copayment amounts range anywhere from $0-$50 and up.

Coinsurance

Medicare Part B charges a 20 percent coinsurance that you will out pay out-of-pocket after your deductible has been met. This amount can add up quickly with a Medicare 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 percent of your services. With a Medicare PPO plan, you will have both an in-network max and out-of-network max.

Below is a comparison chart for what your costs may look like if you enroll in a Medicare Advantage PPO plan in a major U.S. city.

Plan nameLocationMonthly premiumPart B premiumIn-network deductibleDrug deductibleCopays & coinsuranceOut-of-Pocket MaxPlan Name
Aetna Medicare Prime 1 (PPO) Denver, CO $0 $144.60 $0 $0 PCP: $0/visit
specialist: $40/visit
$5,500 in-network Aetna Medicare Prime 1 (PPO)
Regence MedAdvantage Basic (PPO) Portland, OR $0 $144.60 $0 No Coverage PCP: $10/visit
specialist: $40/visit
$5,000 in-network Regence MedAdvantage Basic (PPO)
AARP Medicare Advantage Choice (PPO) Kansas City, MO $0 $144.60 $0 $0 PCP: $0/visit
specialist: $50/visit
$6,400 in-network AARP Medicare Advantage Choice (PPO)
Aetna Medicare Value (PPO) Detroit, MI $0 $144.60 $0 $150 PCP: $0/visit
specialist: $45/visit
$4,800 in-network Aetna Medicare Value (PPO)
Aetna Medicare Essential Plan (PPO) Atlanta, GA $0 $144.60 $250 $400 PCP: $5/visit
specialist: $35/visit
$5,900 in-network Aetna Medicare Essential Plan (PPO)
Aetna Medicare Elite Plan (PPO) Hartford, CT $0 $144.60 $1,000 $0 PCP: $5/visit
specialist: $45/visit
$6,700 in-network Aetna Medicare Elite Plan (PPO)

The data above has been taken directly from Medicare’s Find a Medicare plan website, which you can use to search for available Medicare Advantage PPO plans in your area. This tool also allows you to see what your costs may look like if you take certain prescription drugs or receive financial assistance.

Before you enroll in a Medicare PPO plan, you’ll want to consider the following advantages and disadvantages and how they can affect your quality of care.

Advantages of Medicare 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 PPOs

  • Medicare 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. All these additional fees can cause healthcare costs to add up quickly. In addition, research has also suggested that PPO plans don’t offer as many new benefits as HMO plans do over time.

Medicare Advantage PPO plans are a popular Medicare option for enrollees who are looking for more provider freedom than an HMO plan can offer.

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, there is no requirement for a PCP and referrals aren’t required for specialists, which is beneficial for those who require flexibility.

Comparing multiple plan offerings in your area can help you choose the best Medicare PPO plan for your needs.