PPO Health Insurance Plans – Forbes Advisor


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There are several health insurance plans available, which differ in network size, services covered, flexibility, payouts, and price.

Preferred Provider Organization (PPO) plans are the most common type of employer-sponsored health plan on the market, but represent a small percentage of Affordable Care Act (ACA) plans: approximately 46% of Americans with an occupational health plan are enrolled in a PPO plan, according to the Kaiser Family Foundation. But only 19% of ACA plans are PPOs, according to a Forbes Advisor analysis of ACA plans.

What is a PPO health insurance plan?

A PPO is a type of health insurance plan known for its flexibility. Insurance companies use medical providers and health facilities to create networks. If you receive care from a doctor in the PPO network, the insurance company offers the highest level of coverage and you pay the lowest costs.

PPO plans allow you to get medical care from an out-of-network provider, but the services are covered at a much lower percentage.

Also, a PPO generally does not require you to get a referral from your primary care physician to see a specialist, such as an orthopedic surgeon or dermatologist.

How does a PPO health plan work?

When you consult a doctor in the OPP network, your health insurance covers a percentage of the costs once you reach your deductible. You pay the rest. This is called cost sharing.

Health care providers and facilities in the PPO network agree to be paid a certain amount for various services, usually at a discounted rate.

For example, let’s say you hurt your wrist and need an x-ray, which will cost you $300. In this example, the cost of an X-ray at an in-network facility has a $60 co-payment, while your cost at an out-of-network provider on the plan has a 35% coinsurance. In this case, the cost of an X-ray in an in-network facility would only be $60, compared to $105 for an out-of-network.

With a PPO, your health insurance company tries to entice you to get in-network care because it costs you less. However, you still have the ability to manage your own care, without the need for specialist referrals from a primary care provider.

Although you can see specialists without getting prior approval, PPO plans often require prior approval for certain procedures, medications, or types of care. Unless it’s an emergency, you may need to get approval from the insurance company before moving forward with a specific treatment plan, such as surgery. This prevents your insurance company from covering potentially unnecessary expensive treatments.

How much does a PPO health insurance plan cost?

The average monthly cost of a PPO plan for a 30-year-old male is $458. See below the averages for other ages, couples and families.

PPO health plan costs

A PPO is much more expensive than a Health Maintenance Organization (HMO) or Sole Provider Organization (EPO) plan, which are much more common in the ACA market.

Cost of PPO vs. HMO vs. EPO

Whether you purchase an individual health insurance plan from the Affordable Care Act marketplace or directly from an insurer, your health insurance premium depends on factors such as your age, smoking status, people with plan load, plan tier, and your location. This is different from employer-sponsored health insurance, which is a group plan that offers the same rates regardless of health condition.

Employer-sponsored health plans are less expensive than ACA plans without government subsidies. Data from the Kaiser Family Foundation shows that employees with a group health plan pay an average of $1,389 per year for a PPO plan for individual coverage and $6,428 per year for family coverage. Employers typically pay the majority of premium costs for health plans ($6,702 for single coverage on average and $16,884 for family coverage).

In general, PPO plans have higher average premiums than other types of health insurance. However, you have access to a much wider network of doctors and health care facilities.

Advantages and disadvantages of PPO health insurance

Whether a PPO health plan is the best choice for you depends on what you expect from your coverage. Here are the pros and cons of PPOs.

Benefits of PPO

  • No need for specialist references: With a PPO plan, you don’t have to work with a primary care provider, and you don’t need a referral to see specialists. This is a good option if you feel comfortable managing your own medical care and don’t want to go through your primary care provider (PCP) to see a specialist.
  • Flexibility to leave the network: PPO plans allow you to receive treatment from health care providers and facilities that are not part of the network. Other health plans, such as an EPO and HMO, often don’t pay for out-of-network care.

Disadvantages of OPP

  • More expensive premiums: PPO health insurance premiums are generally more expensive than other types of health insurance. If you are in good health and rarely see the doctor, you may be able to find a cheaper plan to meet your needs.
  • No PCP: A primary care provider can help you navigate the healthcare landscape, but PPOs generally don’t require you to choose a PCP.


Compared to PPO plans, HMO plans generally have lower premiums and cheaper out-of-pocket expenses. However, HMO plans generally provide no coverage for out-of-network care. If you want to see a doctor or visit an out-of-network hospital, you are responsible for the entire bill and the money you pay will not go towards your annual deductible.

On the other hand, PPO plans do not require referrals and working with a primary care provider is optional.

Main Differences Between PPO and HMO

PPO versus EPO

EPO plans are popular options for people who want affordable health insurance. Not only are the premiums lower than a PPO plan, but EPO health insurance also often has lower out-of-pocket expenses. The main downside is that you can only get coverage from an in-network provider, which means you have less flexibility and fewer provider options.

Main Differences Between PPO and EPO


A Point of Service (POS) plan is a true hybrid between a PPO and HMO plan. The insurance company provides coverage for out-of-network care, but you are responsible for a much larger share of the cost share. You are still encouraged to seek treatment from an in-network provider, but you are allowed to see non-in-network providers.

In terms of cost, POS plans are generally cheaper than PPO plans. This is because PPO plans offer the most flexibility to see providers in-network and out-of-network. Unlike a PPO, POS plans require referrals.

Main Differences Between PPO and POS

Who Should Subscribe to a PPO Health Insurance Plan?

PPO insurance plans can be a good choice for people who want the ability to visit any doctor and hospital and see specialists without a referral. If you prefer to manage your own medical care without the supervision of a primary care physician, a PPO might be the right choice.

When deciding if a PPO plan is right for you, it’s also important to consider the cost. Because PPO plans offer so much flexibility, the premiums are much higher. If you want the most affordable health insurance plan with low costs, a PPO plan probably isn’t the right option for you.

PPO Health Plan Frequently Asked Questions

Does a PPO cover out-of-network care?

Yes, PPO plans cover out-of-network care, but often they don’t help as much as if you were getting in-network care. The exact cost-sharing structure for out-of-network care depends on the specifics of your plan. But you usually pay less to see a provider that is part of the PPO network.

Do you need a primary care doctor if you have a PPO?

Primary care physicians are not needed if you have a PPO. You can manage your own care and consult the doctor of your choice, without having to consult or contact your doctor first.

If you already have a relationship with a primary care physician, you can continue to work with them. If they contract with the PPO network, their services will be covered at the higher rate.

Do PPOs need a referral to see a specialist?

No, PPO insurance does not require a referral from a primary care physician if you wish to see a specialist. This can speed up the process of getting specialist care.

If you choose a specialist yourself, be sure to look for specialists who are part of your PPO’s network to get the best coverage for your insurance company.


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