Preferred Provider Organization (PPO)
A PPO is a Medicare Advantage plan type that lets you see any provider, with lower costs in-network and higher costs out-of-network. PPOs generally do not require referrals to see specialists.
Understanding Preferred Provider Organization (PPO)
A Medicare Advantage PPO (Preferred Provider Organization) gives you more flexibility than an HMO. You can see any provider that accepts Medicare, but you pay less when you use the plan's preferred (in-network) doctors and more when you go out-of-network. PPOs generally do not require you to choose a primary care physician or get referrals to see specialists.
For beneficiaries, this flexibility is valuable if you travel, split time between states, or want to keep a specialist who is not in the network. The trade-off is that PPO premiums and out-of-pocket costs are often higher than HMOs, and out-of-network care usually counts toward a separate, higher out-of-pocket maximum.
For example, if your in-network specialist copay is $40 but you choose an out-of-network specialist, you might pay 40% coinsurance instead — a much larger bill for the same visit. Checking the in- and out-of-network cost share before you enroll helps you budget.
Have questions about PPO plans? Get a free Medicare review and we will compare PPO and HMO options side by side for your situation.
Related Terms
Health Maintenance Organization (HMO)
An HMO is a Medicare Advantage plan type that generally requires you to use in-network providers and choose a primary care doctor, with referrals to see specialists. Out-of-network care is usually covered only in emergencies.
Provider Network
A provider network is the group of doctors, hospitals, and other providers that contract with a plan. Medicare Advantage plans use networks; staying in-network lowers your costs, while Original Medicare lets you use any provider that accepts Medicare.
Medicare Advantage
Medicare Advantage (Part C) is an alternative to Original Medicare offered by private insurance companies approved by Medicare. These plans include Part A, Part B, and usually Part D coverage in one plan.
Need Help Understanding Your Options?
A licensed Medicare advisor can explain how preferred provider organization (ppo) applies to your specific situation.
Get a Free Medicare Review