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 do not have to pick a primary care doctor, and you do not need a referral to see a specialist. 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 — though you will pay more out of pocket.

PPO stands for Preferred Provider Organization. The word "preferred" means the insurance company has negotiated lower rates with certain doctors and hospitals. If you use those doctors, your share of the cost is smaller. If you go outside the network, the insurance company still pays part of the bill, but you cover a larger share.

PPO Medicare Advantage plans are different from HMO plans, which require you to use only in-network doctors except in emergencies. They are also different from Original Medicare, which is run by the federal government and works with any doctor who accepts Medicare.

Key Takeaways

  • PPO Medicare Advantage plans let you see any doctor without a referral, but you pay less if you stay in the plan's network.
  • You must be enrolled in Medicare Part A and Part B to join a PPO Medicare Advantage plan.
  • Each plan has its own network of doctors, hospitals, and pharmacies, so you need to check whether your current doctors are included.
  • PPO plans have an out-of-pocket maximum — once you reach it in a calendar year, the plan pays 100 percent of covered services for the rest of that year.
  • You can switch to a different plan or back to Original Medicare during the annual enrollment period, which runs from October 15 to December 7 each year.

How Costs Work in a PPO Plan

PPO Medicare Advantage plans charge a monthly premium, just like other Medicare plans. Some plans have a zero premium, meaning you pay nothing per month beyond your Part B premium to Medicare. Others charge $50 to $200 or more per month. The premium you pay depends on which plan you choose and which insurance company offers it in your area.

Beyond the premium, you pay out-of-pocket costs when you use medical services. These costs include copayments (a flat fee per visit), coinsurance (a percentage of the bill), and deductibles (an amount you pay before the plan starts to help). In-network costs are lower than out-of-network costs. For example, an in-network doctor visit might cost you $15, while an out-of-network visit might cost you $50 or more.

Every PPO plan has an out-of-pocket maximum. This is the most money you will have to pay in a calendar year for covered services. Once you reach this limit, the plan pays 100 percent of your covered costs for the rest of that year. Out-of-pocket maximums vary by plan but typically range from $5,000 to $7,500 for in-network services.

In-Network Versus Out-of-Network Care

When you use an in-network doctor or hospital, the insurance company has already negotiated a price with them. You pay your share (copay, coinsurance, or deductible), and the plan pays the rest. Your out-of-pocket costs count toward your out-of-pocket maximum.

When you use an out-of-network provider, the plan still covers part of the cost, but you pay a higher percentage. Your out-of-pocket costs for out-of-network care may or may not count toward your out-of-pocket maximum — this varies by plan, so you need to read your plan documents. Some plans have a separate out-of-pocket maximum for out-of-network services.

Before you join a PPO plan, check whether your current doctors are in the network. You can do this on the insurance company's website or by calling the plan directly. Ask specifically whether your primary care doctor, any specialists you see regularly, and your preferred hospital are included. If your doctor is not in the network, you can still see them, but you will pay more.

Prescription Drug Coverage

Most PPO Medicare Advantage plans include prescription drug coverage (Part D). This means your medications are covered under the same plan, rather than through a separate drug plan. The plan has a list of covered drugs called a formulary. Your cost for each drug depends on which tier it is on — generic drugs are usually cheaper than brand-name drugs.

Like medical services, prescription costs are lower at in-network pharmacies. You can use any pharmacy, but chain pharmacies like CVS, Walgreens, and Walmart are usually in the network. If you use an out-of-network pharmacy, you will pay more. Some plans require you to use mail order for certain medications or for 90-day supplies.

If your current medication is not on the plan's formulary, you have options. You can ask your doctor to prescribe a different medication that is covered, or you can ask the plan for an exception. The plan may agree to cover the drug anyway, especially if you have been taking it for a long time and it works for you.

When You Can Enroll and Switch Plans

You can join a PPO Medicare Advantage plan during the Annual Enrollment Period, which runs from October 15 to December 7 each year. Any plan changes you make during this period take effect on January 1 of the following year. This is the main time to switch plans or to switch from Original Medicare to a Medicare Advantage plan.

If you are newly may be able to access for Medicare, you have a 7-month window called the Initial Enrollment Period. This starts 3 months before the month you turn 65 and ends 3 months after. If you miss this window and do not have other health coverage, you may pay a penalty when you do enroll.

If you move to a new state or your plan leaves the market, you may be able to switch plans outside the annual enrollment period. You also have a 45-day window to switch if you are unhappy with your plan choice, though this applies only in certain situations. Contact Medicare at 1-800-MEDICARE to ask whether you may have access to for an exception.

What to Ask Your Doctor and Insurance Company

Before you enroll in a PPO plan, contact your current doctors and ask whether they accept that specific plan. Do not just ask if they accept Medicare Advantage — ask about the exact plan you are considering, because doctors may be in one plan's network but not another's. Ask about wait times for appointments and whether they are taking new patients.

Call the insurance company and ask about the plan's network in your area. Ask which hospitals are in network, whether your pharmacy is included, and what the out-of-pocket maximum is for both in-network and out-of-network care. Ask whether there are any restrictions on seeing specialists or using certain hospitals. Request a copy of the plan's formulary so you can check whether your medications are covered.

Ask the plan whether it covers services you use regularly, such as physical therapy, mental health care, or dental work. Some PPO plans include extras like dental, vision, or hearing coverage, while others do not. Ask about any prior authorization requirements — some plans require you to get permission from the insurance company before certain procedures.

When to Seek Help or More Information

If you are confused about how a PPO plan works or whether it is right for you, contact Medicare directly at 1-800-MEDICARE. You can also visit Medicare.gov and use their plan comparison tool to see all available plans in your area, their costs, and their networks.

Your State Health Insurance information Program (SHIP) offers free counseling about Medicare plans. You can find your local SHIP by calling 1-877-839-2675 or visiting shiptalk.org. A counselor can walk you through your options and help you understand the differences between plans.

If you have a chronic condition or take multiple medications, ask whether your current doctors and medications are covered before you enroll. If you realize after enrolling that a plan is not working for you, remember that you can switch during the next Annual Enrollment Period.

Frequently Asked Questions

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

No. Unlike HMO plans, PPO plans do not require you to choose a primary care doctor or get referrals to see specialists. You can go directly to any doctor or specialist, though you will pay less if they are in the plan's network.

Can I see my current doctor if they are out of network?

Yes, you can see an out-of-network doctor, but you will pay a higher share of the cost. Before you enroll, check whether your doctor is in the specific plan's network. If not, ask your doctor whether they would consider joining the plan, or be prepared to pay more.

What happens to my out-of-pocket costs if I use both in-network and out-of-network doctors?

This depends on your plan. Some plans have a single out-of-pocket maximum that counts both in-network and out-of-network costs. Others have separate maximums for each. Check your plan documents or call the insurance company to find out how your plan handles this.

Can I switch back to Original Medicare if I do not like my PPO plan?

Yes. You can switch to Original Medicare or to a different Medicare Advantage plan during the Annual Enrollment Period (October 15 to December 7). If you switch to Original Medicare, you may want to enroll in a separate Part D drug plan and a Medigap plan to cover costs that Original Medicare does not pay.

Are dental and vision covered in a PPO Medicare Advantage plan?

Some plans include dental, vision, or hearing coverage, but not all do. Check the specific plan's details before you enroll. If your plan does not cover these services, you can purchase separate dental or vision plans, though they are not part of Medicare.