How PPO Medicare Advantage Plans Work in 2024

What a PPO Medicare Advantage Plan Is

A PPO Medicare Advantage plan is a type of Medicare Part C plan run by a private insurance company that lets you see any doctor or specialist without getting permission first. You pay less when you use doctors and hospitals in the plan's network, but you can also go out of network and still have some of your costs covered — you'll just pay more out of pocket. Unlike HMO Medicare Advantage plans, which require you to pick a primary care doctor and get referrals, a PPO gives you the freedom to see whoever you want.

PPO stands for Preferred Provider Organization. The "preferred" part means the insurance company has negotiated lower rates with certain doctors and hospitals. You don't have to use them, but it costs you less if you do. This flexibility is the main reason people choose PPO plans over other Medicare Advantage options.

Key Takeaways

PPO Medicare Advantage plans let you see any doctor without a referral, and you pay less when you use in-network providers.
You can see out-of-network doctors and hospitals, but your out-of-pocket costs will be higher than in-network care.
PPO plans include prescription drug coverage, dental, vision, and hearing benefits that Original Medicare does not cover.
You must live in the plan's service area and keep paying your Part B premium to stay enrolled.
Open enrollment runs from October 15 to December 7 each year, and changes take effect January 1.

How In-Network and Out-of-Network Care Works

When you use a doctor or hospital in your PPO plan's network, you pay a copay (a fixed amount like $25) or coinsurance (a percentage of the cost). The insurance company pays the rest. Your out-of-pocket costs are predictable because the provider has agreed to accept the plan's rates.

If you see a doctor outside the network, you still have some coverage, but the insurance company pays a smaller share. You'll receive a bill for the difference between what the doctor charges and what the plan pays. This can be hundreds of dollars for a single visit. Before going out of network, call the plan to find out what percentage they'll cover and what you might owe.

You can find your plan's network doctors and hospitals on the insurance company's website or by calling the plan's customer service number. Most plans let you search by specialty, location, and whether they're accepting new patients. It's worth checking before you schedule an appointment, especially if you have a doctor you want to keep seeing.

What Costs You'll Pay

PPO Medicare Advantage plans have several types of costs. You pay a monthly premium (usually $0 to $200, though some plans charge more), and you keep paying your Part B premium to Medicare. You also pay a deductible before the plan starts covering costs — this varies by plan and can range from $0 to several hundred dollars for in-network care.

After you meet the deductible, you pay copays or coinsurance for each visit or service. A copay might be $25 for a doctor visit or $50 for an emergency room. Coinsurance is a percentage — for example, you might pay 20% of the cost of an X-ray and the plan pays 80%. Out-of-network care usually has higher copays or coinsurance.

PPO plans have an out-of-pocket maximum, which is the most you'll pay in a year for in-network care. Once you reach it, the plan covers 100% of your in-network costs for the rest of that year. The out-of-pocket maximum varies by plan but is capped by Medicare at a certain amount each year. Out-of-network costs usually don't count toward this maximum.

Extra Benefits Beyond Original Medicare

Most PPO Medicare Advantage plans include prescription drug coverage (Part D), so you don't need a separate drug plan. They also cover dental care (cleanings, fillings, sometimes dentures), vision care (eye exams, glasses or contacts), and hearing aids — benefits that Original Medicare does not pay for. Some plans also cover fitness programs, transportation to medical appointments, or over-the-counter health items.

The exact benefits and how much they cover depend on which plan you choose. One plan might cover two dental cleanings a year and basic fillings, while another covers more extensive work. Read the plan's Summary of Benefits to see what's included before you enroll. These extra benefits are why many people choose Medicare Advantage over Original Medicare, even though the trade-off is less freedom in choosing providers.

How to Enroll and When You Can Switch

You can enroll in a PPO Medicare Advantage plan during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Changes take effect January 1. You enroll through Medicare.gov, by phone at 1-800-MEDICARE, or by contacting the insurance company directly.

If you're new to Medicare and turning 65, you have a seven-month window to enroll without penalty — three months before the month you turn 65, the month itself, and three months after. If you miss this window and don't have other may have access to coverage, you may pay a permanent penalty.

If you're already in a PPO plan and want to switch to a different plan or back to Original Medicare, you can do so during the Annual Enrollment Period. You can also switch plans if you move out of your current plan's service area or if you lose your current coverage. Some life events, like losing employer coverage, may let you switch outside the Annual Enrollment Period.

PPO Plans Versus HMO and PFFS Plans

The main difference between a PPO and an HMO (Health Maintenance Organization) is flexibility. With an HMO, you must choose a primary care doctor and get referrals to see specialists. You can only see in-network doctors except in emergencies. With a PPO, you don't need referrals and can see out-of-network doctors anytime, though it costs more.

HMO plans usually have lower monthly premiums and lower copays than PPO plans, but less freedom. PPO plans cost more but give you more choice. If you travel frequently, see specialists often, or want to keep your current doctors, a PPO may be worth the extra cost. If you're willing to use a network and don't mind referrals, an HMO might save you money.

A PFFS (Private Fee-for-Service) plan is less common. It works more like Original Medicare — you can see any doctor who accepts the plan — but it's run by a private company. PFFS plans are available in only some areas. Most people choose between PPO and HMO plans.

Things to Check Before You Enroll

Before you pick a PPO plan, make sure your doctors and hospitals are in the network. Call them or check the plan's website. Ask whether they're accepting new Medicare patients, because some doctors limit how many Medicare patients they see. If your current doctors aren't in the network, you'll need to decide whether you're willing to switch or pay more to see them out of network.

Check the prescription drug formulary — the list of drugs the plan covers — if you take regular medications. Not all plans cover all drugs, and some require you to try a cheaper drug first before they'll cover the one your doctor prescribed. Call the plan if your drug isn't listed or if you have questions about how much you'll pay.

Look at the plan's out-of-pocket maximum and deductible. A plan with a higher premium but lower deductible and out-of-pocket maximum might cost less overall if you use a lot of health care. Use the Medicare Plan Finder tool on Medicare.gov to compare plans side by side.

Frequently Asked Questions

Do I have to use a primary care doctor in a PPO plan?

No. Unlike HMO plans, PPO plans don't require you to choose a primary care doctor or get referrals. You can see any doctor or specialist directly. However, some plans may encourage you to pick a primary care doctor for coordination of care, even though it's not required.

What happens if I move out of my plan's service area?

If you move, you can switch to a different Medicare Advantage plan that serves your new area, or switch to Original Medicare. You have 60 days after you move to make the change. Contact your current plan or Medicare to find out what plans are available where you're moving.

Can I go back to Original Medicare if I'm in a PPO plan?

Yes. During the Annual Enrollment Period (October 15 to December 7), you can switch from a PPO plan to Original Medicare. If you switch, you may want to enroll in a separate Medigap or Part D plan. You have 63 days after leaving the Medicare Advantage plan to buy a Medigap policy without being denied for pre-existing conditions.

Are PPO plans available everywhere?

No. PPO Medicare Advantage plans are available in most areas, but not all. Availability depends on where you live and which insurance companies offer plans in your region. Use Medicare.gov's Plan Finder to see which plans are available in your zip code.

What if I need emergency care while traveling?

PPO plans cover emergency care anywhere in the United States and in some cases outside the country. You don't need to use in-network providers for emergencies. After the emergency is treated, follow-up care should be in-network when possible to keep your costs down. Call your plan to understand what counts as an emergency and what your costs will be.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.